
The iconic home button has been a mainstay of Apple design ever since the first iPhone debuted in 2007. Even the buttons on the elevators at Apple Park are said to resemble it. The button's tactile circularity promises an escape route to familiarity should users get lost or apps go wrong. However, its delicate components converge upon a recess in the phone's bezel, an area that could otherwise provide extra space to fit a larger display within the same handset profile.
Rumors that the "iPhone 8" will replace the home button as we know it with an entirely virtual one can be traced back to April 2016. More recently, KGI Securities analyst Ming-Chi Kuo claimed that Apple will introduce a functionally distinct area below the screen exclusively for displaying virtual buttons, with a rumor over the weekend seeming to suggest that such a "function bar" is the reason behind conflicting reports over the display size of an upcoming OLED iPhone.

Before the "function bar" rumor first surfaced, MacRumors forum member deuxani shared concept images, reproduced below, that offer some context for imagining how the bar might work.
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Article Link: How a Home Button and Function Bar Could Work on the 'iPhone 8'