> Put your finger on the Home button, and just like that your iPhone unlocks. It’s a convenient and highly secure way to access your phone. Your fingerprint can also approve purchases from iTunes Store, the App Store, and the iBooks Store, so you don’t have to enter your password.
It is definitely intended to replace passwords. Pretty good security would be to require both the fingerprint and a PIN (for unlocking the phone, at that stage a fingerprint is fine for authenticating iTunes' digital purchases).