Apple reportedly has engineers working on a stylus for the iPhone. Despite Steve Jobs' famous lines disparaging smartphones with a stylus ten years ago, times have changed. The iPad Pro supports Apple Pencil, and devices such as the Galaxy note come with the accessory. Should Apple launch an iPhone-compatible pencil, it wouldn't be available until 2019.
A report from The Investor, based in South Korea claims Apple may need to upgrade its processors to add handwriting support. As for the stylus itself, the accessory would likely be smaller than the current Apple Pencil.
Sources indicate Apple is seeking a partnership with a stylus manufacturer to develop a supercapacitor type "digital pen" for iPhone. This technology would not require additional components to be installed under the iPhone display. It's possible Apple would release the iPhone pencil alongside a larger version of the iPhone X. It's not clear if Apple's designers would include a place to store the stylus within the body of the iPhone, like some competing devices.
The Apple Pencil was released two years ago, and currently only works with iPad Pro models. The company does not refer to the $100 device as a stylus. The accessory charges via Lighting port and makes it possible to draw at different angles and with varying pressure, simulating pen and paper.