While rare, failure of the camshaft position sensor can cause a variety of problems, ranging from a no-spark situation to performance issues. These position sensors are devices that contain moving parts and, as such, are liable to fail, although the majority of cars that have them will not see such a failure during the lifetime of the vehicle.
Camshaft position sensors rely on a toothed or slotted wheel attached to the camshaft to determine the position of the camshaft (and, by extension, the positions of the pistons) at any time during the operation of the engine. The toothed wheel relies on the Hall effect (a phenomenon in which an electric current is altered when a magnetic field is brought in proximity of a special semiconductor chip), which produces a digital signal when the teeth pass by the other part of the position sensor. Another type of camshaft position sensor shines and receives light from an LED through slots on a wheel that is attached to the camshaft.
The camshaft position sensor sends a signal to the ignition module or the electronic control module (whichever computer is responsible for telling the coils when to fire). This signal carries information on where the camshaft is (and, thus, where each piston is). The information is critical, because an engine can only run properly if the spark plugs fire near the top of the compression stroke, and the computer would be unable to adjust the ignition timing to compensate for driving conditions without that information.
A failed camshaft position sensor will show up in a number of ways. The worst-case scenario is that there is no spark in the combustion chamber. Other symptoms related to the position sensor can include excessively long cranking time when starting cold, rough running on an intermittent basis, poor idle, stumbling or hesitation, a drop in mileage and stalling upon acceleration. These position sensor trouble symptoms may also be caused by a failure in the wiring of the sensor.
Most modern ignition systems are made without a distributor, and some of these use the signal from the camshaft position sensor to control the ignition timing. Without a properly functioning camshaft position sensor, the engine will be unable to run efficiently---even if the engine is designed to run using the signal from the crankshaft position sensor as a substitute.
An ignition system based on a camshaft position sensor allows the engine to run without having a distributor, and that means fewer moving parts to break down, as well as no need for the traditional maintenance of replacing the points or the rotor.