It's in meters, but your device is fine - the issue is that that the
GPS system has to make an approximation about the shape of the Earth
and the average sea level, but it is only an approximation so you will
find differences between the GPS average sea level and the local
average sea level. See:

http://www.esri.com/news/arcuser/0703/geoid1of3.html

if you are interested in the details.

Local grid systems (like British OS grid) often use their own datums
so that the height corresponds more accurately to the local sea level.
A GPS application that provides altitude in such a local grid system
should do the conversion for you.

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