I think the missing information here is how the phone is encrypted. If it's done with the 4-digit numeric PIN, then the software could be built; it would take 1

I think the missing information here is how the phone is encrypted. If it's done with the 4-digit numeric PIN, then the software could be built; it would take 10000 tries, but at less than .1 seconds per try, it would be able to crack the code in about 15 minutes. The current iPhone has a protection for this; after some number of tries, it will lock you out for increasing time intervals. This is the only way that their claims might possibly be valid. And a reminder, then: change your iPhone's password to a more complex one. If apple doesn't make this fake OS, someone will. Edit: to expand on this, Apple's PR goal was to take advantage of the NSA mass surveillance scare. On-device encryption is not very relevant to that. iCloud security is much more important, and they've been quietly granting data from it to the Feds. Including iPhone backups which contain most of the data they're looking for.