The idea is simple; iPhones have built-in compasses and those contain a magnet. The software uses that magnet to detect if the object you hold close to it also has magnetization or not. To calibrate this feature, you need a piece of magnet (like a fridge magnet or a magnetic clip from your bag perhaps earplugs like BeatsX). You have to move it across the screen without touching it and where you see the highest result is where the compass located on the phone. Tap the screen there, the app saves the spot and from now on once you move your watch over this area the app will tell If it has magnetization or not. Be careful, it can also magnetize your watch so try to move it closer to the screen but not too close and never touch the screen with it. Clever, right?