So this happened...
If you're sitting there at home biting your tongue off with anticipation to buy this new way of interacting with your iPad, you're in for a disappointment. This is just an experiment from the minds of students at ECAL/University of Art and Design, in Switzerland.
Little Boxes is a music box concept for iPad. It consists of a tangible part composed of three separate music boxes that interact with an iPad and an application. When placing one of the boxes on the iPad, it recognizes it and activates. The idea is that each box contains its own universe revealed by the action of the crank with an animation and melody proper to each. The aim is to give a new dimension to the music box, and transcribe visual sensations that don't exist in a standard music box. This work reflects my desire to play with the physical and digital elements by making them interact. It allowed me to embrace different areas, and confront myself with creative and technical challenges. The result is the creation of a world through the music box, where everyone can enter and interact with it.
I'd guess it is using magnets for note (and visual) information. They don't give any details. Thanks to Palm Sounds for bringing this to my attention, after he picked it up from iOS Music & You.... the circle of a life!