Some Great News for Apple Inc.'s iPhone 8

By Ashraf Eassa Markets Fool.com

The early leaks around Apple's (NASDAQ: AAPL) upcoming iPhone 8 suggested that the company planned to integrate its Touch ID fingerprint scanning technology directly into the phone's display. This integration would allow Apple to retain its much-loved Touch ID technology, while nearly eliminating the bezels on the front of the phone.

Continue Reading Below

In recent weeks, however, rumors have circulated that Apple might -- due to manufacturing difficulties related to the in-display Touch ID sensor -- drop this feature, instead opting to either eliminate Touch ID or use a rear-mounted fingerprint scanner on the iPhone 8.

Image source: Apple.

Per a new report from Economic Daily News, summarized by DigiTimes, Apple will, indeed, go with a fingerprint scanner embedded in the display.

What's the source?

DigiTimes' summary of the Economic Daily News article says that this information comes from "sources from Taiwan Semiconductor Manufacturing Company (TSMC)."

Continue Reading Below

Investors may know TSMC as the manufacturer of some of Apple's A9 processors and all its A10 chips found inside of current iPhone models, but TSMC is also believed to be the contract manufacturer for Apple's current Touch ID sensors.

Given Apple and TSMC's successful collaboration on Touch ID technology for previous generations of iPhones, it makes sense that the former would continue to work with the latter on future Touch ID technology.

Furthermore, since it is likely that TSMC will be manufacturing Apple's next-generation Touch ID sensor technology, it makes sense that individuals working at the contract chip manufacturing giant would know all about the Touch ID technology that'll be used in the iPhone 8.

Great news for Apple, if true!

If this information is true, then it seems like a clear win for the company. Apple's iPhone 6s-series didn't sell as well as the iPhone 6-series did, and it doesn't look like the current iPhone 7-series will live up to the iPhone 6-series' greatness, either.

With the upcoming iPhone 8, Apple has an opportunity to drive iPhone unit shipments and revenue to record highs, as the design is expected to be all-new. While it wouldn't have been impossible for Apple to have a great iPhone 8 cycle with a compromised Touch ID, I do think the lack of Touch ID, or a rear-mounted Touch ID, would have turned quite a few potential buyers off from buying the device.

Not only is a Touch ID sensor embedded directly into the display likely to be much more pleasant to use than a rear-mounted Touch ID sensor, but such integration would be a really "cool" feature that increases the sense of technological wonder of the new device.

Remember that while smartphones have become so integrated into many of our lives that they've virtually become necessary products to own, Apple must both convince current iPhone users to upgrade to newer iPhones, as well as try to get owners of Android smartphones to want to switch to the iPhone.

With Touch ID integrated into the display, coupled with all the other rumored features and design changes that'll be coming to the iPhone 8, there seems to stand a good chance of driving Apple's iPhone revenue to new heights after a few disappointing product cycles.

10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 1, 2017

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.