The overhauled camera could enable facial recognition and iris recognition, 9to5Mac reported, citing Kuo's research. Kuo said Apple is far ahead of Google's Android in terms of 3-D algorithms, according to 9to5Mac.
Apple, which rarely weighs in on speculation about unreleased products, declined to comment to CNBC.
JPMorgan has also predicted that upcoming iPhones may have a front-facing 3-D scanner, which could provide biometric scans and replace the home button. Gene Munster of Loup Ventures has speculated that Apple is likely working on an augmented reality platform.
Apple's latest iPhone, the iPhone 7 Plus, already has powerful features that lend themselves to virtual and augmented reality, like dual lenses and a new "portrait" software mode. Augmented reality selfies are big business, too — as demonstrated by Snapchat, which has recently filed to go public.