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According to a new report from Bloomberg, which is most likely sourced by someone very close to Apple, and therefore highly credible, the iPhone 7 home button will not have a physical mechanism, but rather will be pressure-sensitive using haptic feedback. The new home button is said to operate in a similar way to the trackpads in the newest range of MacBooks. This ties in with a previous report from 9to5 Mac approximately one month ago.
The Bloomberg story also confirms several other rumours about the next iPhone, such as the dual-camera system for the iPhone 7 Plus, but not the standard iPhone 7, as well as the removal of the 3.5 mm headphone jack, with the previous 3.5 mm-jack-connected EarPods being replaced by Bluetooth-connected and Lightning-connected EarPods. Bloomberg’s source does not reveal whether or not Bluetooth-connected EarPods will be included as standard with the iPhone 7 (I’m guessing that they won’t be, but you never know). The source says that the headphone jack is being removed in order to make way for a second speaker.
Source: New iPhone to Have Dual Camera but No Headphone Jack