Apple’s 10th-anniversary flagship iPhone will almost certainly have a new design. The tentatively called iPhone 8 is said to sport a bezel-less 5.8-inch OLED display. It means Apple will have to kill the physical home button and find a new place for the fingerprint sensor, which ideally should be the display itself. Other rumored features include 3D sensors for augmented reality and facial recognition.

Apple iPhone 8 Concept
Image Source: Moe Slah / Concepts iPhone / YouTube video (screenshot)

iPhone 8 fingerprint sensor suffers from low yield rates

As the iPhone 8 unveiling inches closer, reports suggest that many of the new features intended for the 10th anniversary iPhone are facing significant bottlenecks in the implementation or production. If Apple fails to sort out the problems in time, it may have to drop those features or delay the iPhone 8 launch.

Cowen & Co analyst Timothy Arcuri said in a research note (via Apple Insider) Wednesday that integrating the fingerprint sensor underneath the display glass was a major challenge. Supply chain sources told the analyst that yield rates for the company’s in-house AuthenTec solution were still low. At this point, Apple isn’t interested in sourcing the component from other vendors.

Apple has three options

Cowen & Company said Apple plans to finalize the fingerprint sensor specifications by the end of May. If the tech giant fails to resolve the yield issues, it will have three possible solutions. The first solution is to get rid of the fingerprint scanner and rely entirely on the facial recognition. However, facial recognition is still a novel technology that needs to be refined and tested for accuracy before it can be considered reliable enough to replace the Touch ID.

The second option is to relocate the fingerprint sensor to the back of the iPhone 8, similar to what Samsung has done with the Galaxy S8. But it will not be user-friendly. People won’t be able to unlock the phone if it is sitting on the table without picking it up. The third solution, says Arcuri, is to delay the iPhone 8 production. Cowen & Co. said Apple could still announce the 10th anniversary device alongside the iPhone 7S and 7S Plus, but push back its launch to October or November.

Apple may have to drop the 3D sensor

Implementation of the in-display fingerprint scanner is not the only problem haunting Apple. Earlier this week, Needham & Company analyst Rajvindra Gill told investors that the 3D sensing module might not be ready in time for the iPhone 8 because of the implementation bottlenecks. Gill said Apple might drop the feature from the iPhone 8, and introduce it with the 2018 iPhone 8S.

The 3D sensor is required for new features like augmented reality and facial recognition. Gill said Chinese Android vendors might trump Apple in bringing the 3D sensing technology. The iPhone 8S won’t arrive until late 2018. But Chinese companies such as Oppo, Vivo, and Huawei could add the feature to their smartphones as soon as early next year.

If the 3D sensor doesn’t make it to the iPhone 8, Apple may have to delay the rollout of augmented reality applications. The company is betting big on AR, with more than 1,000 Apple employees currently working on various AR hardware and games.

Problems with the lamination of OLED displays

Taiwanese publication DigiTimes reported last week that Apple and its suppliers were facing technical issues with the lamination process of the curved OLED screens. The site said it could delay the iPhone 8 launch by a couple of months. Apple is sourcing 70 million curved OLED panels from Samsung Display for the iPhone 8. The curves won’t serve any real purpose. They will only enhance the aesthetic appeal.

It’s not rare for a smartphone maker to experience manufacturing issues. Samsung had to delay the launch of its Galaxy S8 by more than a month as it worked to enhance the safety of its devices following the Galaxy Note 7 fiasco. Last year, Apple had to push back the release of the Jet Black iPhone 7 and 7 Plus. It’s fine if the iPhone 8 arrives a month or two later than expected as long as it has the features to woo consumers. Dropping the key features may disappoint Apple fans.

Apple yet to finalize iPhone 8 design

Technical issues with the fingerprint sensor and 3D sensing modules help explain why we haven’t yet seen any supply chain leaks of schematics or components. Apple might not yet have finalized the iPhone 8’s design. Last year, supply chain leaks about the iPhone 7 had started surfacing around March. Cowen & Company has an Outperform rating on Apple stock with a $155 price target.

Timothy Arcuri told investors that all the three iPhones coming this year would pack 3GB RAM. Though the 10th anniversary iPhone is said to have a 5.8-inch bezel-less OLED display, the usable display area would be only 5.1-inches. The rest of the space would be dedicated to a new “function area” that would offer dynamic controls based on the apps on the screen, similar to the Touch Bar on MacBook Pro.

The iPhone 8 was previously rumored to cost more than $1,000. But more recent reports suggest only the top-end 256GB iPhone 8 would be priced between $950-$1,000. All other variants would cost less than $950.