Given what looks like a resonant cavity, and the 'short' battery life of the guitar body, I'm guessing they have an audio amplifier built into the guitar and they pick up the signal from the docking connector.
> "Since the gTar is entirely digital, it doesn't care whether the strings are in tune or not."
I can't even see any pickups, so I'm guessing it simply checks what fret you're holding and detects strumming/picking some other way.
That seems to be supported by "...cannot be retrofitted onto a traditional guitar...". So, basically, you're stuck using your iPhone as the only interface option.
All up - isn't this just a solution looking for a problem?
Given what looks like a resonant cavity, and the 'short' battery life of the guitar body, I'm guessing they have an audio amplifier built into the guitar and they pick up the signal from the docking connector.