An inductive proximity sensor belongs to the category of non-contact electronic proximity sensor. It is used for positioning and detection of metal objects. SN04-N is an inductive sensor in rectangular shape, NPN normall open type. It's sensing range is 4mm.
The output for this sensor is an open collector type. This means it is like a switch that connects the signal wire to ground (0V) when activated, and leaves it open circuit when not active. When you connect to a microcontroller to detect this changing you need to connect a pull-up resistor (1K-10K) between the signal wire and the power supply.