I'm currently working on this issue, and I think this might help:
convert device coordinate system to world corrdinate system
We can assume that for the most of the time, people use the phone standing or walking or sitting, which means the user coordinate system share the same z-axis(gravity), and a fixed difference in degree between y-axis (user coordinate, front of user's face) and y-axis(world coordinate, north direction). The difference of degree can be obtained via TYPE_MAGNETIC_FIELD sensor. Thus we can transform from world coordinate to user coordinate.
What's about the user using the phone lying on the bed? I think for that kind of case, a pre-calibration is need by define y-axis of user coordinate, like a movement to tell the phone which direction is the front of user's face.