The need to sense speed and position of ferrous gears occurs in numerous industries. Purely mechanical systems have been used with the attendant issue of wear and failure limiting its use to low speed and low duty cycle applications.
Hall-Effect geartooth sensing makes use of the Hall element to sense the variation in flux found in the airgap between a magnet and passing ferrous gearteeth. A modern approach is to convert the signal from the Hall element to a digital value and then perform signal processing to create a digital output from that effort. Melexis has chosen to work with digital signal processing schemes and in this way minimize the magnetic circuit manipulation required of the end user. Put simply, by applying silicon "smarts" the magnetic subtlety and "sleight of hand" is nearly eliminated.

Continuously adapting gear-tooth sensor