I think some smartphone navigation apps do temporary dead reckoning, using the accelerometers that are built into the phone.
Dead reckoning using just acceleration data loses accuracy quickly. Using turns to reset position is a really good idea. I think I've seen my iPhone do a similar "recovery" procedure when it gets a little off track.
I have had my Android phone continues to plot my travel through a tunnel when it couldn't receive GPS signal. It's usually off by a small margin when I reach the end of the tunnel but everything syncs once the signal is acquired again.
I've used navigation apps that do this on iPhone, but the navigation portion of the app didn't realize I was in the tunnel, so it kept telling me to make turns on surface roads...
Dead reckoning using just acceleration data loses accuracy quickly. Using turns to reset position is a really good idea. I think I've seen my iPhone do a similar "recovery" procedure when it gets a little off track.