The dial on the instrument on the iPad is touch-enabled. Turn it with your fingertip and it adjusts the altimeter (or heading bug, etc.). I’ve also used SPAD.neXt to code the dials on my FIPs to make those adjustments as well, in case I’d rather use a physical knob.
My understanding is you can also use rotary encoders that are then assigned values in the software. Depending on encoder depth and panel depth, you can make the instruments look quite nice. What I don’t know though is how easy it is to use encoders (with a controller card via USB connection) drive gauges on an iPad). I have see it done on monitors but I know AirManager’s software is a bit different for iOS.
It’s not hard, at least in principle<g>. Take a look at, for instance, ArdSimX. You can find, or buy, little mouse encoders and hook them up to an Arduino board, use ArdSimX to create the software, and you have it. Of course, you have to build something to hold the encoders while allowing you to see the gauges from AirManager. I’ve proven to myself that I can do it, but I have not yet got encoders mounted, wiring hidden, etc.