Tiny earphone simultaneously picks up speech.
A new microphone which fits inside the ear could make mobile phone and media player headsets almost invisible in future.
The microphone relies on a sophisticated signal processing chip developed by Sanyo in Japan, which revealed the new concept at the weekend.
Sanyo's LC70700W chip is designed to drive a tiny earphone and microphone combination that inserts directly into the ear.
The chip is based on research carried out by Sanyo subsidiary Sanyo Semiconductor Corp, which the parent company span off in July owing to heavy losses.
A vibrating diaphragm inside the earphone generates sound, much like a standard earphone. However, the same diaphragm is also able simultaneously to pick up the user's speech.
The volume level of speech recorded inside the ear is only around three per cent of the normal amplitude picked up by standard microphones close to the mouth, according to Sanyo.
But the chip's digital signal processor is able to separate out the weak voice signal from environmental sounds. The processor also removes its own audio output from the voice signal.
The device relies on sound waves which travel internally through the head to the inner ear when people speak.
These internal sound waves make the ear drum vibrate slightly, and the air movement caused by this faint vibration is picked up by Sanyo's combined earphone and microphone.
Sanyo claims that the voice input sound quality is better than that generated by bone conduction microphones, which tend to overemphasise low frequencies and miss frequencies above 3,000Hz that help to make speech more intelligible.
The 12mm square chip will cost around $25. Initial production samples will be available in November, and Sanyo plans to ramp up production to one million chips a month by the end of 2007.
The company did not provide information about potential projects based on the new technology, but product specifications suggest that Sanyo is targeting the chip at the telephony and mobile telephony markets.
Sanyo reported revenues of more than $21bn in its most recent fiscal year.