Something newfangled is new, like a fancy new gadget or invention. This is a folksy way of describing a fashionable (and often too fashionable) thing.
If someone says — “What is that newfangled thing?” — they’re using a humorous, casual word for things that are new, current, or fashionable — especially too-fashionable things. Using this word implies that the person isn’t very impressed with the newfangled thing, implying that it’s new for the sake of being new. This word is a little insulting, as in “Why do you always have to have a newfangled phone?” Calling something newfangled isn’t very respectful to the new thing.