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What was originally thought to be measurement using the Piezoelectric effect (which explains why the sensor needs to be placed below the foot), as reported here, turns out to be a simple play with Accelerometers. While a Piezoelectric crystal also fits with the economic, accuracy and power consumption models, using an accelerometer really frees the user from buying the Nike+ shoes. Nice work Mr. Jobs.
Incidentally, accelerometers are also at the heart of the new Wii(I had the previlige of testing one today - it's wonderful! Now you can actually get some exercise playing a tennis video game) and the Tango bike.
What's bad about this Apple device? Two things -