So the Nexus 5 specs list something under sensors called “hall effect”. I’m still trying to figure out how exactly it’s used, but based on some limited research it might relate to the phone’s compass. From what I’ve gathered, it should make for a more accurate compass that can determine orientation more quickly than a standalone “compass” on a phone. And perhaps, though this is conjecture, it might make for a compass that is less susceptible to that of interference, which I’ve widely experienced using the iPhone 4s or any older generation device.
Wikipedia has some info, albeit rather technical and convoluted.
The Hall effect is the production of a voltage difference (the Hall voltage) across an electrical conductor, transverse to an electric current in the conductor and a magnetic field perpendicular to the current. It was discovered by Edwin Hall in 1879.
The Hall coefficient is defined as the ratio of the induced electric field to the product of the current density and the applied magnetic field. It is a characteristic of the material from which the conductor is made, since its value depends on the type, number, and properties of the charge carriers that constitute the current.