Apple stated last week that it would not comply with a request from the U.S. Federal Bureau of Investigation (FBI) to unlock an iPhone 5s that belonged to a suspect in the San Bernardino terrorist attack that took place in December 2015, Syed Farook. According to Apple CEO Tim Cook, the company has already cooperated with the FBI to the extent of providing requested data and having Apple engineers help investigate mobile devices that belonged to the deceased suspects in the case. However, Apple will not take the next step of actually decrypting the iPhone in question. To do so, it says, would required the creation of software that does not currently exist, a so-called “backdoor” that would bypass the passcode-based encryption system built into the iOS operating system. Currently, if a wrong passcode is entered into an iPhone 10 times, the phone’s data will automatically be wiped.

Cook said that if the U.S. government can force Apple to decrypt a phone, it “could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.” Supporting Apple in its refusal to build a “backdoor” are Facebook, Google and Twitter. Google Inc. CEO Sundar Pichai said that if Apple were to comply with the FBI request, it would set a “troubling precedent.”

Tarifica’s Take

Much of the U.S. discussion of this ongoing crisis has revolved around the interpretation of the law under which the FBI is pursuing its quest for the encrypted information, the All Writs Act of 1789. But from a telecom industry perspective, rights and wrongs under U.S. law are less important and relevant than the issue of mobile device encryption as a marketing strategy and as a potential bone of contention between companies such as Apple and national governments around the world. Apple’s creation of a native smartphone encryption system that is inaccessible to Apple itself has a very powerful branding function. In the post-Snowden environment we live in, strong security measures have come to be very attractive to consumers, not just to corporations, governments, and the military. In addition to the specter of government surveillance and privacy invasion, the ever-growing threat from criminal hackers, coupled with the increasing linkage between phones and financial services, has intensified consumers’ desire to have maximum protection on their devices. By giving its phone an “unbreakable” lock, Apple has positioned itself very well in today’s market.

Whether or not a “backdoor” software, if created, would ever escape Apple’s headquarters and become the common property of hackers worldwide, Cook knows that compromising the iPhone’s encryption would hurt the company’s reputation with customers. Of course, if Apple does not prevail in court, the FBI will get its way in the end, regardless of what Apple says. However, to be seen as defending privacy as vigorously as possible will be good for the device manufacturer no matter what the outcome. On the other hand, if Apple wins in the U.S., that would not necessarily settle the question forever—a government elsewhere in the world could eventually try to force Apple to compromise its encryption for similar or different reasons, and Apple would then face the choice of giving in or withdrawing its business from that country entirely. If the country is big enough, the financial loss could be very harmful, even devastating, to Apple.