While opinions vary about Apple's new Touch ID fingerprint sensor in the iPhone 5S Home button, there does seem to be a consensus that Apple will yet again be successful in bringing a new technology to the mainstream in an area where others have failed. Other smartphones have used biometric sensors, but according to a Reuters report on Yahoo News, those offerings have largely flopped because the sensor was inconveniently located on the back of the phone and would often take a number of tries before it would work. Apple, in its trademark way, has made biometric security simple and effortless.
Apple says that half of smartphone users don't use a passcode on their device, likely because of the inconvenience when turning on one's phone. The beauty of Apple's approach is that you turn on your phone as you always do, but it will only turn on if it's you pressing the button. For this reason alone, Touch ID will generally create greater security.
An article in Wednesday's Wall Street Journal gives more detail about Touch ID, including the fact that it may not always work. But in order to enable Touch ID, you're required to set up passcode access on your device. So if Touch ID doesn't work for some reason, you can still access your phone. Apple said that Touch ID sometimes doesn't work if your finger is sweaty or covered with lotion or other liquids. Also, if your phone has been unlocked for more than 48 hours or has been rebooted, you'll need to use to use your passcode to unlock it.
Some have gruesomely suggested that thieves would not only steal your phone but also your finger. According to CNET, the fingerprint sensor doesn't use optics and actually will only work if it senses living tissue.
The article also explains that your fingerprint image isn't stored anywhere—not on your phone, not on servers. The A7 processor turns the image into data, and the date is stored in the processor. It's never uploaded to Apple's servers, or anywhere else. The article says that even if thieves hacked into your phone and accessed your fingerprint data, they likely wouldn't be able to reverse engineer your fingerprint.