Apple might eliminate the Touch ID feature from the iPhone 8 if it fails to resolve issues with integrating the fingerprint sensor below the display of the phone within the next few weeks.

An excerpt from the research note from Andy Hargreaves, equity research analyst at Pacific Crest Securities, obtained by MacRumors, suggests Apple could possibly delay production of its next iPhone until the fingerprint sensor is ready.

"Likely options for Apple include a delay of production or elimination of fingerprint sensing on the OLED iPhone. We believe Apple continues to work on solving its optical fingerprint issues. If it's able to solve the problems in the next month or so, it would likely place volume orders at that point. This would likely lead to a delay of the OLED iPhone launch, but we would not expect it to meaningfully affect volume for the cycle. If it's not able to fix the problems in that time frame, Apple may be forced to eliminate fingerprint sensing from the OLED iPhone altogether," Hargreaves mentioned in the note.

Hargreaves believes Apple has not given firm orders to its optical fingerprint module provider for production, which suggests the fingerprint sensor functionality is not ready yet. According to Hargreaves, Apple has evaluated Synaptics optical fingerprint solution.

He further notes the removal of Touch ID would put significant pressure on 3D sensing, which could be an alternative to fingerprint.

"Suppliers suggest that the solution is both fast and highly reliable, even in low-light scenarios or from odd angles. If this proves accurate, reliance solely on 3D sensing for biometric login and verification could be a viable and innovative replacement for the highly popular fingerprint sensor," he noted.