AFAIK iOS actually uses the pattern of veins below the fingertip rather than an image of the fingerprint itself. So I can't imagine this would be enough to unlock an iPhone.
However, they are showing their attack working on a Macbook Pro with touchid, which uses this sort of reader. So it's easier to fake in practice than it is in theory. Whatever material you lift the print off of should have to mimic the capacitive behavior of the finger and this looks like it busts Apple's claim that it can read the lower layers (or it tells us their default sensitivity is set too low for convenience)