my magic mouse does not move the cursor, but it does scroll down and up and responds to gestures... Could it be a broken laser diode?

It may seem the phone would have disrupted the connection, causing it to not connect properly anymore.

Do something called an SMC reset, but along the side, take the batteries out of the mouse for 15 seconds then put the batteries in and turn it on again. Do this just before you turn on your iMac after the SMC reset. This should work. if it doesn't, try on a different system. If you don't have a different system, try in Recovery mode (Hold command+r straight after power-on) and try it there. This decides on if it is the software or not.

if you do have another system and it doesn't work, i suggest checking the batteries. That doesn't work? Bring it into the store you got it from.

If it doesn't work in recovery, take the mouse to place of purchase to test on one of their systems.

let me know how you go.

Have you tried replacing the batteries?

Herbit in New Zealand

I have late 2015 iMac and a magic mouse 2 which i have been using sucessfully since December 2015 with the mouse running on a cloth ( sort of) on foam mouse pad. I charge the mouse . Recently the cursor will not move properly on this surface. I tried turning the pad over but that didnt help.

I have found it operates on a smooth, shiny cover of a hard cover exercise ( school etc) book.

Any help would be appreciated.