With everything else out of the ring, we're able to pull out the motherboard for its closeup.

A quick look at the last component hanging off the side of the motherboard reveals an Avago ADBM-A350 optical finger navigation module, responsible for detecting the position of the outer steel ring.

This component works similarly to an optical mouse's sensor, by snapping images of the inside of the ring and comparing sequential pictures to determine position as it spins.