Noted KGI Securities analyst Ming-Chi Kuo released a research report today in which he outlined further expectations for Apple's 2017 iPhone, including new biometric identification technology as well as the necessity of a new design to provide better structural support for a flexible OLED display with 3D Touch capability.



Apple may switch to a film sensor from the current FPCB sensor in order to provide better 3D Touch user experience, as a film sensor offers higher sensitivity. Also, we expect the new OLED iPhone will come with a flexible OLED panel. To avoid deforming the form factor of the flexible OLED panel from touch operation pressure, a metal structural part will be placed under the film sensor to provide more robust structural support.

Kuo also believes Apple is developing a new Touch ID technology for its next iPhone "to complement its full-screen (zero bezel) form factor design and to enhance transactions security". According to Kuo, the existing "under glass" design of fingerprint recognition doesn't meet the requirements of full-screen form factor designs, therefore an "under panel" placement is required.

As a result, Kuo says Apple aims to switch from the current capacitive-type to an optical-type system. Despite the technology still being in the early stages of development and the fact that OLED panel makers will have to provide bespoke designs for the system to work, Kuo believes Apple has the bargaining power to request the customizations.

Judging by the bio-recognition patents that Apple has applied for, we believe it is leaning toward facial recognition technology rather than iris recognition. However, we note that the technical challenges of facial recognition include: (1) algorithms; (2) hardware design; and (3) the build-out of a database for verification and authentication, which could be time consuming. As such, before Apple can fully replace the fingerprint system with facial recognition, a combination of the two steps of bio-recognition could be a valid solution for enhancing transactions security.

Notably, Kuo believes the fingerprint recognition system will "ultimately be replaced by a facial recognition system" for enhanced security. "However, if the technical challenges cannot be overcome, we believe a combination of fingerprint and facial recognition is another possible solution."

Assuming the technological challenges are not too great and adoption this year isn't too soon, Kuo suggests Apple's new system will usher in a "paradigm shift" for the application of biometric identification in smartphones.

Kuo's latest report builds on previous predictions regarding this year's "10th anniversary" iPhone, which is expected to feature a radical redesign with an embedded home button in an edge-to-edge display, a glass body, and potentially wireless charging. Previous rumors suggesting the iPhone 8 could include advanced biometric features like facial recognition or iris scanning have pointed to the possibility that they could also power augmented reality camera functions.