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Fingerprint Cards: A new x factor in iPhone X?

The rumors of Apple launching an iPhone without TouchID or a fingerprint sensor proved correct during yesterday evening's Apple event. Instead, the so called iPhone X will use face recognition, although it should be noted that two of the phone models presented had a fingerprint sensor.

We find the long term consequences of iPhone X and FaceID rather hard to grasp at the moment. Apple has previously killed or almost killed numerous of businesses when deciding the industry technology agenda and setting the example for its peers, one prominent example being the popularization of pro cap touch sensors. FaceID might have a significant, negative, long term impact or instead only a smaller effect if the FPC customers can withstand the pressure from the iPhone X. We also note historical examples of Apple previosuly being forced to retreat following new inventions.

iPhone X appeared to be rather slow, taking 2-3 seconds to open - something that likely is hard to resolve in a camera based solution. According to Apple it has a FAR of 1/ 1 000 000. We find it less important that Apple had unlocking problems at the event though. The important question is rather if Apple decisively will pursue the FaceID approach or not. We notice that Apple CEO, Tim Cook, stated that the iPhone X is "the biggest leap forward since the original iPhone" and that it is the future way of unlocking the phone.

A silver lining to these clouds is that the iPhone X could boost the demand for Delta ID and iris.

We will carefully study the aftermath and evaluate eventual effects. As we have insufficient and very limited information at the moment we will not make any immediate changes in our estimates or valuation. However, FaceID wil clearly add uncertainty to the FPC share and FPC customers following suit represent a major negative catalyst.

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