There are few analysts with as good a track record as KGI’s Ming-Chi Kuo when it comes to Apple. His close links to companies in Apple’s supply-chain puts him in a good position to judge what is and isn’t on the way when it comes to new products.
Former Time and Fortune writer Philip Elmer-DeWitt last year put Kuo’s reliability under the microscope, finding (in an admittedly unscientific fashion) that his overall reliability was 44%.
Examples of where Kuo got it wrong included the iPhone 6 being pushed into 2015 (it launched on schedule in 2014), the next iPhone after the iPhone 6 being called the iPhone 7 (it was called the 6s, as expected), a 50% year-on-year drop in iPad sales in Q2 2015 (it was 25%) and a drop in iPhone sales to 49.4M units in Q1 2015 (it was 61.2M).
I have two reasons for suspecting that Kuo is wrong this time too.
First, there’s no good reason for Apple to drop Touch ID. I’m perfectly willing to believe that the company has hit yield issues with a version embedded into the screen. It’s a difficult technical trick to pull off reliably, and the idea that Apple has managed to do it in prototypes but not reliably in volume production is entirely plausible.
But just because Apple can’t embed the fingerprint sensor into the actual display is no reason to drop it altogether. Sure, moving it to the back of the phone would be a terrible idea, but Apple already holds a patent for embedding it into a power button – and that’s not the only possibility.
I discussed before how Apple could make the fingerprint sensor appear to be part of the screen without technically being so.
Look at the Touch Bar on the 2016 MacBook Pro. At first glance, this is a single OLED strip running the entire width of the keyboard. A closer look reveals that this is, again, illusion. The Touch ID button is a physical button sitting alongside the Touch Bar itself. It’s a separate, physical button designed to blend into the surroundings.
This would be completely consistent with Kuo’s own reports, in which he said that the iPhone 8 would have a ‘function’ area beneath the screen that would be part of the front of the phone, but not part of the main display.
We also have to remember where Kuo gets his info: companies that make components for the iPhone. They will know a lot about the particular component they make, but wouldn’t necessarily know much about any other aspect of the device.
It seems to me entirely possible that a screen supplier (either Samsung or another company involved in the various layers that make up a complete iPhone display) has told Kuo that there that there’s no fingerprint sensor in the display. And that may be correct. But that doesn’t mean there isn’t a separate supplier for the Touch Bar-like ‘function area’ (like say LG) which isn’t sharing everything it knows. So my theory about a Touch ID sensor embedded in that remains perfectly plausible.
But there’s a second, even simpler, reason for doubting the omission of Touch ID: Apple Pay.
Yes, I’m quite happy to accept that Apple could have developed an infrared face-recognition system that’s good enough to be used to unlock the phone. But Apple Pay has been sold to banks and retailers on the basis of the proven security of Touch ID. Swapping this out for a completely new and unproven face-recognition system would be, at the very least, controversial. I’d expect some searching questions to be asked by banks and merchants alike.
There’s also the practicality issue. When you use your iPhone to take a payment via Apple Pay, you’re holding it out away from you, against a payment terminal. That would be a pretty oblique angle for a face-recognition system to work. And since half the point of Apple Pay is convenience, it has to work reliably. Touch ID does; I’m not convinced that face-recognition would in such circumstances.
And Apple Pay, for all its success, is still in its relative infancy. Even in the UK – which has contactless payment terminals in every major chain and many mom & pop businesses – I still know plenty of iPhone owners who don’t yet use it. More marketing, education, and reassurance is needed. Making a radical change to the way you verify purchases prior to widespread adoption would seem an incredibly risky move.
So I give Kuo his due – but he has been wrong before, and I think he may be here.
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