Microelectromechanical Systems (MEMS) technology is playing a key role in the design of the new generation of smartphones. Thanks to their reduced size, reduced power consumption, MEMS sensors can be embedded in above mobile devices for increasing their functionalities. However, MEMS cannot allow accurate autonomous location without external updates, e.g., from GPS signals, since their signals are degraded by various errors. When these sensors are fixed on the user’s foot, the stance phases of the foot can easily be determined and periodic Zero velocity UPdaTes (ZUPTs) are performed to bound the position error. When the sensor is in the hand, the situation becomes much more complex. First of all, the hand motion can be decoupled from the general motion of the user. Second, the characteristics of the inertial signals can differ depending on the carrying modes. Therefore, algorithms for characterizing the gait cycle of a pedestrian using a handheld device have been developed. A classifier able to detect motion modes typical for mobile phone users has been designed and implemented. According to the detected motion mode, adaptive step detection algorithms are applied. Success of the step detection process is found to be higher than 97% in all motion modes.