At one end of the wire is a 3.5 mm Jack plug. On the other end of the wire is presumably a glass LED.
When connected to the phone, nothing happens. The LED does not start to glow.
Also, this wire doesn’t work as a microphone. It’s also not an earpiece.
What is it for?
As many have said, that’s an IR receiver. That specific model commonly came with Hauppauge TV tuner cards.