Apple Inc. Is Rumored to Ditch the Notch in 2019 iPhone Models

In Sept. 2017, Apple (NASDAQ: AAPL) introduced the iPhone X, a device that was supposed to give customers a glimpse into the future of the iPhone.

One of the key attributes of the iPhone X was that it featured far less bezel than prior generation iPhones did. However, one compromise that Apple had to make in the current iPhone X was a cutout at the top of the display to accommodate the front-facing camera as well as other 3D sensing components. That cutout is commonly referred to as a "notch."

The notch has been controversial -- some people detest it to the point where it is a deal-breaker, while others don't really mind it. Nevertheless, it seems that Apple has taken the criticism of the notch to heart and will reportedly be removing it in the 2019 iPhone models, according to a report from ET News.

Going notchless

"Apple decided to get rid of the notch design starting from 2019 models and is having discussions with relevant companies," said an industry insider, according to ET News.

The report adds that the new display "will be a rectangular display that will completely fill the front of new iPhones." This suggests that Apple won't be adding large bezels to the top and bottom of the phone to eliminate the notch.

From a technical perspective, pulling this off won't be easy, since Apple will need to retain the standard front-facing camera as well as the 3D sensing components required for the company's Face ID facial recognition technology.

Some industry insiders that ET News spoke to suggest that Apple will "either drill holes into OLED panels or use BM (Black Matrix) area within displays."

Impact to Apple's iPhone business

One thing that may have hurt Apple's iPhone shipment growth in recent years has been the company's use of the same basic form factor for its flagship smartphones for four consecutive generations, beginning with the iPhone 6-series. Consumers seem to respond well to changes in form factor and aesthetics, and Apple simply didn't deliver on that front for a while (and when it did in late 2017, the form factor change was restricted to an ultra-premium model).

It seems, though, that Apple is planning an aggressive set of improvements over the next few years. Per the ET News report, the iPhone models that'll launch later this year will have smaller bezels and a smaller notch than the current iPhone X, which should amount to a pleasing aesthetic change. If Apple goes ahead and entirely eliminates the notch in the 2019 models, then the company will have delivered real aesthetic enhancements for several generations in a row, which could help encourage iPhone upgrade activity.

Once Apple moves to a true all-screen display, presumably with the 2019 models, it'll likely become harder for Apple to deliver on significant aesthetic changes. There are avenues that the company could pursue like curved displays and, as was rumored last year for the 2020 iPhones, displays that can be folded, but it'll be interesting to see if these changes are viewed as unequivocally better than a hypothetical all-screen flat panel display.

In the near-term, though, I expect Apple's iPhone product launches to be more exciting than they have been in recent years, which could lead to an acceleration in iPhone sales as current iPhone users upgrade and Apple potentially gains share.

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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.