M7 co-processor will enable applications to be
aware of what type of movement
the user is experiencing, such as driving, walking, running or sleeping. then Application could be the ability to do indoor tracking and mapping.The Apple M7 co-processor collects, processes and stores
sensor data
even if the device is asleep, and applications can retrieve data when the device is powered up again. This will reduce power draw of the device and save battery life
For more info refer this wiki