The following website (http://www.tonefrenzy.com/heet_electronics_ebow.htm) explains it as an "electromagnetic design, involves holding a battery operated device that looks like a stubby, metallic check mark, in close proximity to the strings, near where you'd usually hold a pick. The electromagnetic vibration is strong enough to make the string vibrate by carefully holding the device right next to the string." Also, the manufacturers of the e-bow have their own site (http://www.ebow.com/index.html) which has a lot of information on how it works, but obviously they don't give away their trade secrets. You might also try the Delphion Intellectual Property Network page (http://www.delphion.com/ - now available by subscription only) which provides access to the whole patent, complete with the electronic schematic.
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