I still think there will be a fingerprint reader , but it will be on the back of the new iphone.
There are more and more clues that apple won' t be able to implement an inscreen touchid button , yet, with the release of an iphone x. Maybe later. The s8 that has yet to be released by samsung also doesn' t have it in-screen, but on the back.
I think(and i know it is a stretch) , apple will put it on the back, behind the apple logo, and will release new cases with a precise apple logo cutout( they are the only one that can do that because of copyright.) Since apple is making more and more money from accesories the last few years, this will fit in their business strategy.
It will be used like this:
-apple pay, touchid on the back can be used, you can feel the apple logo , put your finger on the logo and pay with the phone without looking at the phone.
-unlocking the phone: when picking up your iphone/raise the iphone, the locking screen will apear.( just like it does now) and the virtual homebutton will apear. When you press the virtual homebutton the facial recog tech will kick in and unlock your iphone instantly.
-when you make an online purchase, you can pay by touchid on the back, or with facial recognition. Or both (Determined by your settings/preferences).
I hope this won' t happen, but you never know at apple.
I doubt that Apple will put touch id on the back for the following reason. It makes little sense when you understand the fact that people have got used to where touch id is at the moment. Putting it on the back makes no sense from a ui perspective. The phones that do have them on the back are not as easy to use compared to the iPhone.
Next you have to look at the software and hardware and how they relate to each other. Take for instance when iOS had reachability introduced. That was not just a feature for the sake of it, it was to prepare for the larger screen iPhone 6 and 6+ to be released later.
Now we look at raise to wake in IOS. That makes little sense eon it's own. Where as if you look at it in relation to (if) Apple placed touch id under the screen then it makes sense.
You raise the iPhone and the screen turns on and the virtual home button is there, you press it and (if touch id is activated) the iPhone unlocks. and (if touch id is not activated)then the passcode screen shows itself.
The reason also that Samsung(and others) have not (to date) placed the fingerprint reader under the screen/part of the screen is because A)they are unable to do so correctly due to not having touch id and B) Apple have that patented very well indeed. With the continuing spat between Apple and Samsung Samsung will find it harder to copy certain patents of Apple.
The touch id being part of the screen and under it is one of them.
Next I think that in regards to the facial scanner if it is accurate(and it is a big BIG if) then it will be in addition to touch id not instead of it. Apple only get rid of things when they have to and the time is right. The time is not right and they have no reason to get rid of touch id.
The facial/retina scanner would work as 2 factor authentication. touch id to unlock the phone and then if you wish to log into your Apple account then you use facial/retina scanner.
Also what about enterprise users who might be able to use the facial/retina scanner to unlock private email accounts that contain sensitive emails, or how about the Department of Defence or the Ministry of Defence etc.
In time the access to the API could be given to third party developers. Similar to touch id so that you load your banking app or goto the website and after inputting your details you can use touch id AND facial/retina scanner and it grants access.
It helps to increase security in so many ways and would allow for so many uses when used in a edition to touch id.