Phones typically use their magnetic sensor to detect north, and give you direction that way. Once GPS shows you are moving (indicated by position is changing), then your phone changes to GPS, which is where they just take the last few fixes, draw a line through them, and say you are going in the direction of the line. Then to display it on the phone, it just assumes the top/front of your phone is facing forward (depending on the orientation of your phone, as detected by accelerometers) and draws the arrow in that direction (so when using GPU, spinning your phone won’t typically cause the arrow to move).
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