Phase Method Decoder
The principle of operation is based on the fact that the phase difference between reference voltage and the voltage induced in the rotor is a direct measure of the shaft position.  The stator windings are excited by two 90º phase-shifted voltage generated by a sine/cosine generator.  The counter is preset to zero at zero crossing of the reference voltage and latched at zero crossing of the rotor voltage, and the difference between preset and latch gives the shaft angle.  The phase method decoders do not have the environmental immunity of the ratiometric converters.  The trade-off is the relatively lesser cost of the phase method decoders.

Ratiometric vs. Phase Method Decoder
The ratiometric converters can track the shaft movements faster and can be mounted at a greater distance from resolvers as compared to phase method decoders.  They are also more immune to electrical noise and variations of voltage, frequency, temperature, etc.  Due to the more complex circuitry involved, the ratiometric converters are usually more expensive than phase method decoders.  In general, for more reliable operations, the ratiometric converter should be used.  In some applications, where wiring run is short and well shielded, system speed is slow or slow reacting outputs like electromechanical relays are used and the installation is relatively free of electrical noise, the phase method decoder may be considered for a cost effective design.