Personal Finance

Is Apple, Inc. About to Kill Touch ID?

Apple Pay on iPhones

Touch ID has been an unqualified success. By integrating biometric security into iPhones, Apple (NASDAQ: AAPL) raised the bar in terms of what consumers expect of their smartphones, and rivals expectedly followed suit by implementing their own fingerprint sensors shortly thereafter. But there's been some speculation for years that Apple is interested in removing the home button on future iPhones, which just so happens to be where the Touch ID sensor is integrated. Meanwhile, it may adopt some sort of 3D facial recognition or iris scanning technology to bolster the iPhone's biometric security.

Would Apple really kill Touch ID altogether?

Rumor has it

That's the theory that JPMorgan analyst Rod Hall is putting forth (via MacRumors ). Hall believes that Apple will finally pull the trigger on killing the home button with the iPhone 8, Apple's 10th-generation iPhone due out later this year. This would allow the company to implement an edge-to-edge display. Apple is reportedly looking to include a 3D laser scanner that would allow for facial recognition, a component that runs around $10 to $15.

Apple Pay on iPhones

Touch ID made Apple Pay possible. Image source: Apple.

Hall notes that Touch ID sometimes fails, like in wet conditions. iPhones have been getting progressively more waterproof, so using Touch ID under wet conditions is more common nowadays. Facial recognition could work more seamlessly, and could even be used for Apple Pay authentication. It's also worth pointing out that since facial recognition is very software-intensive, the performance would likely be able to improve over time via software updates as the recognition algorithms improve over time. It's even possible that the laser scanner could be used for augmented reality applications, something CEO Tim Cook has been discussing at length in recent months, which could similarly be added later on via a software update.

Third-party developers might eventually even get access to a 3D scanning application programming interface (API), which has the potential to unleash a wave of innovation.

Will Touch ID join the headphone jack?

If you recall, Touch ID was based on Apple's 2012 acquisition of AuthenTec for $356 million , which itself was a clear signal that Apple was planning on integrating fingerprint sensors. Touch ID would debut the following year in 2013's iPhone 5S, and subsequently made its way throughout the iPhone portfolio. While it would be a shame to shutter Touch ID, Apple has sold 690 million total iPhones and generated nearly $450 billion in iPhone revenue since the iPhone 5S launch, so it certainly got its money worth from the acquisition since Touch ID has been a key feature that contributed to sales growth ever since.

MacBook Pro family

2016 MacBook Pros with Touch Bar were the first Macs to get Touch ID. Image source: Apple.

What's more peculiar, however, is the fact that Apple only recently brought Touch ID to the Mac in last year's MacBook Pros with Touch Bar. This was widely seen as a starting point, and Apple is expected to subsequently bring Touch ID to the rest of the Mac lineup. Apple is already testing out stand-alone keyboards with Touch ID for Mac desktops, according to a Bloomberg report from December.

Instead of killing Touch ID, Apple should just supplement it with facial recognition instead of replacing it since Touch ID has become an integral part of how users interact with their devices. Until Apple's fall event, which will probably be in September as usual, we won't know if Touch ID will suffer the same fate as the headphone jack.

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Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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