According to a report by Bloomberg, whose sources have seen the images, the thing which is going to replace the home button is a thin software bar placed at the bottom of the screen, coupled with gesture controls.
The bar can be dragged up to the middle of the screen to wake the device from sleep. When used inside an app, it could be used to explore more features, like the redesigned multitasking for the new iPhone. The user can drag it up to the top of the screen to reach the home screen.
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