It reads your fingerprint. You use it to sign into your phone. It's a security feature. A coworker mentioned this. What if it's cold and you're wearing gloves? Sad trombone. I have a 4s which was the first version that allowed one to use one's phone as a wireless router without having to jailbreak it with Cydia. It seems perfectly adequate to me. So far the newer phones don't have must-have features that make me want to run out and buy a new phone.
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