The Atlantis guitar uses some special pickup technology: LightWave Analog Optical Pickup System. It uses light to detect the string vibration — no magnetics used. Here is how they describe it:
The optical pickup is a proprietary type of transducer which utilizes an infrared emitter and an array of photodetectors for each string. The emitter casts a shadow of the string onto the photodetectors. As the string vibrates, the size and shape of the shadow changes accordingly and modulates a current which passes through the photodetectors. This current is the analog electrical signal which represents an accurate depiction of the vibrating string.
If you think about it, this is not that different than the technology used in the optical mouse! Very ingenious use of technology. Since it uses light to detect the vibrations, there’s no electrical or magnetic issues, so it’s supposedly extremely sensitive and noiseless.
I really like the use of light technology instead of magnetics. However, because it uses light, there needs to be power supplied. If you take a look at the bridge, it is much bigger than a standard bridge (probably due to the need for a rechargeable battery pack). This could definitely affect the acoustic tone of the guitar. Also, it isn’t clear that the sound from the optical pickup is superior to other methods, but it’s early in technology so we’ll have to see. I definitely would like to see a smaller bridge and a bridge that can easily retrofit into a Strat, Tele, or Les Paul style guitar. The size would affect the tone less in a solid-body electric, but there would still be the issue of needing a battery.
Finally, an obvious issue which isn’t mentioned is that the optical pickup system is part of the bridge. Since we know that vibrations picked up there tend to have much higher order overtones and harmonics than the fundamental, this might work well for a substitute for a bridge pickup — but what about the warmth of a conventional neck pickup? This is no longer possible because the optical pickups are not located there. That’s the beauty of magnetic pickups — they can be placed almost anywhere (other than the fretboard), are small, and passive.