Typically, the use of a stylus is limited to resistive touchscreens. You can't use a normal stylus on capacitive touchscreens like the iPhone for example. Cypress has announced new screen tech that allows capacitive touchscreens to accurately take advantage of a stylus.
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The screen tech promises to support stylus input with accuracy of 1mm for the mobile handset market. The feature allows for text entry, keyboard, handwriting, and other functions within mobile apps. The stylus use is particularly useful in Asian character input.
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The Cypress tech is from the firms TrueTouch family and it supports single and multiple touch along with finger gestures. Cypress is working with device makers now to integrate the new screen tech in mobile devices. The Stylus support module is expected to be widely available in Q2 2010.