iPhone 8 Expected to Have 3D Facial Recognition Instead of Touch ID

Apple's widely expected 5.8-inch iPhone with an edge-to-edge OLED display will feature a front-facing 3D laser scanner for facial recognition, corroborating previous rumors, according to JPMorgan analyst Rod Hall.

Hall said the scanner will replace Touch ID on the so-called iPhone 8, as Apple plans to remove the Home button to allow for the edge-to-edge display. His research note claims the so-called iPhone 7s and iPhone 7s Plus could also have a 3D laser scanner based on increased volume of the module within Apple's supply chain.

The scanner is said to add $10 to $15 per module to the iPhone 8's bill of materials, which coupled with the OLED display, glass casing, and other increased production costs, could make its retail price up to $100 more expensive than it would be without those features, if Apple looks to maintain a similar profit margin.

The increased costs are in line with a recent report claiming the iPhone 8 could cost upwards of $1,000 in the United States.

Hall believes the switch to facial recognition will help alleviate consumer frustration when Touch ID does not work under wet conditions. He added that facial recognition will potentially be more secure than Touch ID, which could increase Apple Pay adoption among banks and merchants.

The research note said the 3D laser scanner could eventually be used for other purposes, such as augmented reality, but likely not until 2018 at the earliest.

One obvious and potentially most compelling use would be AR/VR experiences in which the user’s hands and other real world objects are being scanned and integrated into a field of view provided by the iPhone mounted into a Google Daydream-like headset. This would open up many interesting entertainment and gaming experiences not available today and might give Apple something extra in an AR/VR accessory compared to Google and others.

He also believes that Apple is likely to eventually open up a 3D scanning API to developers, who could use it to do "everything from determining your shoe size for online orders to helping make sure you are properly fitted on your bike."

Hall expects a strong iPhone 8 replacement cycle later this year, and he said an announcement about the product is possible as early as WWDC 2017, which kicks off June 5. Apple has not made any iPhone hardware announcements at WWDC since 2010, so treat this claim with a proverbial grain of salt for now.

Earlier this week, KGI Securities analyst Ming-Chi Kuo said while it is "still early to examine hardware support for Apple Pay," he believes the new 5.8-inch iPhone will feature "other biometric technologies that replace the current fingerprint recognition technology," lending credence to Touch ID's removal.

Kuo had previously said that iris or facial recognition could initially complement Touch ID if Apple faced technological barriers, while Cowen and Company analyst Timothy Arcuri noted that facial recognition could either replace Touch ID or augment its functionality to create a two-factor verification system.

Other rumors have suggested that Apple will embed Touch ID underneath the display as technologically possible.