This feature is currently not available when using Microsoft OneNote on iPhone. Microsofts description of the update states: 'Apple Pencil: Write Right: Weve sharpened our Pencils to support the iPad 9.7' iPad Pro. If you still don’t see the Pair button, contact Apple Support. Then try connecting your Apple Pencil again and wait until you see the Pair button. If you don't see the Pair button, wait for one minute while your Apple Pencil charges. To switch back to text mode at any time, tap Text Mode on the far left of the Draw tab, and then tap the screen to display the on-screen keyboard. After todays OneNote update (v 15.21, ), the Apple Pencil works very well in OneNote with no stray marks at the bottom of the page where you typically rest your palm. Connect your Apple Pencil in to your iPad and tap the Pair button when it appears after a few seconds. On the Draw tab, tap the pen, color, and thickness you want, and then use your finger or stylus to draw on the page. Stylus orientation helps OneNote ignore any input your palm may unintentionally create as you write with the stylus. To enable drawing or handwriting notes with a stylus, such as a Microsoft Surface Pen or Apple Pencil, tap Stylus Orientation, and then select how you typically hold a stylus to draw.

If this option is turned off, moving your finger across the screen will pan content on the current page in or out of view instead of drawing on the screen. Turn on the Draw with Touch option to enable drawing with your finger. On the Draw tab, at the far right of the ribbon, tap the Drawing Mode icon. To get started, first select your preferred drawing mode. When you use Microsoft OneNote on your iPad, you can use your finger or a compatible stylus to handwrite or draw notes. Select a drawing mode in Microsoft OneNote

Onenote apple pencil support