Warning: Incomplete write-up.
Server Side:
Image –> Resize to 16px height –> Determine Pixel Red, Green and Blue components –> Compensate, arrange and bit-shift values to a byte string of 12 bit PWM (Pulse Width Modulation) values.
Micro-controller:
Use hall effect sensor for positioning –> Display RGB PWM image using internal microcontroller timers and serial communication.