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RENEE MONTAGNE, HOST:

And if Apple was aiming to please Wall Street yesterday with new lower priced phones and big distribution deals in Asia - it failed. Apple's stock dropped sharply after it unveiled its latest update to the iPhone.

That may be because Apple's iPhone empire was not built on distribution deals - it was built on technology that enchanted consumers.

So we've asked NPR's Steve Henn in to talk about what new technological innovations Apple introduced yesterday.

Good morning.

STEVE HENN, BYLINE: Good morning.

MONTAGNE: What's new in the world of the iPhone?

HENN: Well, for a while now, Apple has coasted along making incremental improvements to its phones and in many ways yesterday was no different. The iPhone 5S will have a faster processor. There's a new chip that will allow it to run motion detectors in the phone all the time without running down the battery as quickly.

Apple also enhanced the camera and is making claims of better battery life - really a lot of stuff that we've seen before. The one thing that I think that has the potential to capture some people's imagination is Apple's attempt to get rid of passwords.

MONTAGNE: Right. Apple is putting a finger print scanner on this phone. Describe that for us.

HENN: Well, Apple calls the system Touch ID. And it works by embedding a small sensor in the little home button at the bottom of the phone. So now instead of tapping in a password to get your phone on or to buy an app, you can simple scan your finger.

But before any of this works you have to train your phone.

MONTAGNE: Oh yeah. Right.

(LAUGHTER)

MONTAGNE: You know, I have a hard enough time trying to train my cat Maggie not to walk across the keyboard when I'm typing. I'm not so sure I want to train my iPhone. How does it work?

HENN: Well, when you're setting up the phone, there's a little set of instructions that will tell you to scan your thumb or finger from different angles. You know, I don't know if you've ever been fingerprinted - but unlike in jail where they roll you finger across a big screen to get a full print - Apple has just as a tiny little sensor to work with here. So it has to take multiple readings of your print and then piece them together. The theory is if they do this right you won't have to pick up the phone in exactly the same way every time for this to work.

You know, Apple's not the first company to have tried this. Motorola introduced a fingerprint scanner back in a phone in 2011 and it received tepid reviews. The thing is a scanner like this, if it doesn't work all the time, pretty quickly it quickly gets annoying.

MONTAGNE: Yeah. What happens if it doesn't work?

HENN: That's a really good question and honestly I'm not 100 percent sure. Apple said that it's possible to turn off the scanner if you don't want to use it. And so I think it safe to assume that if it completely failed to work it would probably default to the old pass code. But I asked Apple that and I didn't get a clear response.

The thing about any biometric system is there are actually two ways biometrics generally fails, and they're related. The first way a system like this can fail is it might allow someone who is not me to access my phone. It could identify your finger as mine and turn it on. That might be awkward, but it's unlikely to be completely disastrous.

The second kind of failure is that I pick it up my phone and it doesn't let me in - a false negative. Now, if Apple designed a system that generated millions of false negatives and customers weren't able to get into their phones, that would be a commercial disaster. So it's pretty likely that Apple has tried to build a system here that delivers more to deliver false positives than false negatives.

So when this phone hits the streets, I'm going to be really curious to see how secure it is in the real world, and whether or not people figure out how to hack it.

MONTAGNE: Well, on that thought, thanks very much.

HENN: Oh, my pleasure.

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