Analyst: iPhone 5S fingerprint sensor limited to user authentication, secure payments due in 2014

iOS 7 (slide to unlock teaser 001)

The upcoming iPhone 5S revision, likely slated for an announcement at Apple’s upcoming September 10 media event, is widely expected to include the fingerprint scanning feature based on Apple’s 2012 acquisition of smart sensor experts AuthenTec.

Now, there’s been a lot of uncertainty as to what software features the smart sensor might support.

According to a research note issued late yesterday to clients, an analyst predicted the feature would be initially used to authenticate users in place of the iOS slide-to-unlock feature because rumored secure payments which are dependent on the smart sensor won’t be ready in time for the iPhone 5S introduction…

MacRumors has the quote from Munster’s note to clients:

We expect the iPhone 5S to include a fingerprint sensor with a basic unlocking feature, but do not believe the sensor will be built into iOS 7 enough to introduce a feature like secure payments as we believe that Authentec has only been a part of Apple for less than one year.

We believe that payments could be a key feature of the next version of iOS in 2014.

I think Munster is only telling half the story.

I don’t think Apple did not have enough time to implement additional fingerprint scanning features on the iPhone 5S. It’s more like fingerprint scanning will be this year’s Siri – that is, an exclusive feature purposefully limited at launch to the iPhone 5S.

But as Apple rolls out the fingerprint sensor across other upcoming iOS devices such as the iPad 5, iPad mini 2 and perhaps even a sixth-generation iPod touch, I imagine the company will gradually roll out additional software capabilities built around the fingerprint scanning hardware.

Apple patent (fingerprint sensor encapsulation 003)
Apple’s patent describes protecting the delicate fingerprint scanning circuitry

At any rate, the company is in an interesting position where it could demonstrate its fingerprint sensor outfitted devices are safe from malware, an important feat for corporate users. And there’s no doubt that the fingerprint sensor is the key pre-requisite for a rumored iTunes mobile payment service.

He’s also expecting an iPhone phablet and a rumored Apple-branded smartwatch by mid-2013 and says the iPad 5 and the new iPad mini will arrive in October. Finally, the analyst re-iterrated his long-standing stance that Apple could unveil a standalone TV setbefore year’s end, “with a 70 percent chance of the product shipping within the first half of 2014″.

iTV mockup (AllThingsD 002)

Interestingly, Munster thinks Apple will keep the current iPhone 5 alongside the iPhone 5S and budget iPhone, which contradicts a report by ETNews alleging Apple will discontinue the iPhone 5 following the upcoming launches. For what it’s worth, Apple’s strategy thus far has included offering past two iPhone generations at reduced prices alongside the current model.

Gene Munster (Apple blockbuster Fall 2013 predictions)
Munster’s predictions regarding Apple’s blockbuster Fall.

Fingerprint scanning, apparently the next iPhone’s killer feature, could obsolete the password by allowing users to authenticate themselves on websites and in apps simply by rolling their thumb over the Home button, a PayPal executive recently opined.

fingerprint-sensor-concept

According to KGI Securities analyst Ming-Chi Kuo, the iPhone 5S could integrate fingerprint sensor in the iPhone’s Home button, which will be protruded in order to provide enough room for the sensor. And because biometric sensors are extremely delicate and prone to wear and tear, Apple is expected to cover the Home button with sapphire.

It’s worth mentioning that AuthenTec’s RF and capacitive sensor technology is far less susceptible to damage than the common optical recognition used in other devices.

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