It has encoders on each axis of the telescope mount that measure rotation. It uses these signals to align itself with known bright stars when you set it up each observing session. It then uses these known positions and an internal database of objects in the sky and their coordinates and gives you a digital countdown readout to help you point the scope in the right direction to find the object. It's a bit like goto - you select the object you are interested in from a list and then you mannually move the mount and it tells you when to stop.
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