I believe the Fed govt can't force Apple to create and give them a key that will un-encrypt all Apple phones.
They can (with a warrant, which they have) compel Apple to tell them what's in that terrorists' phone.
Why doesn't Apple say something like this?
"We want to catch and defeat these terrorists as much as you do. So we'll tell you what we'll do. You hand us that terrorists' phone, and one of your technical guys can come with it to watch everything we'll do. We'll set up a sealed room that WiFi signals can't penetrate, and have no electronic connections in or out of the room.
"We'll put several high-powered computers in there, and have three of our most experienced encryption people work on this phone. Your technical guy can go with them to observe everything, and he can ask them all the questions he wants. But he cannot make any notes or recordings. If they need more software or tables or whatever, they will bring them into the room on media such as flash drives, DVD-ROMS, etc. But nothing that is brought into the room, will ever be brought out again, except the people and the terrorists' phone itself. After a few days, or maybe a week or two, they will come out and hand you complete records of EVERYTHING that is in that phone.
"And immediately after they do that, all the computers, media, and everything else in the room, will be destroyed. And we'll send you the bill for the people's time, the cost of the equipment, etc.
"Then we will be able to tell all our customers truthfully, that there is NO software or program in existence that can decrypt their Apple phone, because it was all destroyed immediately after we decrypted that one terrorists' phone. None of the people who did it (or the govt technician who watched it done) have any notes or records of what they did. They have the thoughts in their heads, of course, but they won't be able to decrypt any other phone unless they go through the entire software-development effort again.
"We are NOT giving the government ANYTHING they could possibly use to decrypt any phone, anywhere. We are giving them only the contents of that one terrorists' phone."
"And if they capture another terrorists' phone next year and get a warrant to decrypt it, we will set up the room again and go through the entire effort again, re-inventing the wheel, and then destroy the system, software, and records immediately afterward.
"That's the deal. Take it or leave it."
Any problem with this?