Ignition Systems; historical & modern, pertinent to BMW Airhead and other motorcycles.
The following article is a SIMPLIFIED explanation of ignition systems, although lengthy. There is CONSIDERABLY MORE technical information, including repairs, etc., in the author's website, particularly here:
Magnetos were in use rather early-on for ignition purposes in automobiles. A another method was also used, consisting, typically, of wooden boxes, with a vibrating electrical contact which sent battery energy into a coil of a modest number of turns of wire wound on an iron core located inside the box. There was another coil of wire wound on that iron core, with thousands of turns, and these turns 'transformed' the lower voltage of the 'primary winding', fed by the battery, to a few thousand volts, and this was applied to the spark plugs. In most early engines the spark was applied continuously. Somewhat later a rotating switch was used. It had a contact or close by contact, one for each cylinder, and this was called a 'distributor'. The only problem with the vibrating contact system is that the spark output can not be set to 'fire' the spark plug at a very specific piston position, although the distributor method helped SLIGHTLY. With the very low compression ratio and very low power output of these engines, together with the very long stroke and large diameter pistons, these ignition methods worked OK. As engines improved in various areas, the need for better and more precise ignition came about.
Vastly more information is available on the Author's website, http://bmwmotorcycletech.info/index.html and there are numerous articles on the BMW airhead electrical system.
Magneto's are simply a permanent magnet method of using mechanical rotational energy (instead of a battery) to produce the high voltage needed to 'fire' a spark plug. The spark (that FIRE thing) is simply a very hot means of igniting the air-gasoline mixture. Magneto's are usually equipped with a set of points (contact points plate), which are nothing more than a mechanically coupled ON-OFF switch...and the energy transfer from the small number of turns coil in that contact circuit is done at the moment the points open, which is set to coincide with a particular high energy alignment of the iron core with the wire in relationship to the magnet. The relatively small number of turns in the 'primary winding' coil acts in somewhat the same way as in the vibrating points method and the later points-condenser-coil method....there is a 'transforming action'. This SAME transforming action is used in all coil ignitions. The basic method is called the Kettering Ignition. More on this later herein.
BMW motorcycles used magneto's in the early models, prior to late 1969 when the /5 series was introduced. Magneto's are difficult to keep down in size when you need higher energy sparks. Lean burning engines demand high energy sparks; although engines were not overly lean back then in the /5/6/7 era. Magneto's one big advantage is that no battery is needed. Magnetos produce more spark voltage at higher and higher rotational speeds, which is another reason why magnetos were popular, particularly on some race engines a long time ago....besides the weight of a battery not being needed (race engines were not generally started by 'starter motors' and did not need lights way back then). Magnetos were, and still are, used on some 'stationary' engines; and versions of magneto ignition are still used on some small motorcycles, lawnmowers, snowblowers, and many types of similar engine'd devices.
From the the time of introduction of the /5 series in December of 1969, until 1981 when BMW introduced the Bosch electronic ignition, BMW's had coil ignition with the points contacts being driven off the engine camshaft, that same camshaft that operates the valves. The contacts, nothing more than a switch, have a capacitor, often called a condenser, electrically connected to them. This system of contact points, capacitor, and coil, all being driven by a battery, was invented by an engineer from GM, and even now, this system is still called the 'Kettering' ignition. In our Airheads, as in all 4-stroke engines, the camshaft rotates at precisely half the crankshaft speed. At the forward nose area of the camshaft is a bob-weight type of simple mechanism called the Automatic Advance Unit (ATU), whose purpose is