I'm also confused by a lot of this since don't you need the password anyway to upgrade?
I bet if Apple is forced to comply with this order they will make sure that they will find a way to design the iPhone such that they physically can't comply with similar requests in the future.
I bet if Apple is forced to comply with this order they will make sure that they will find a way to design the iPhone such that they physically can't comply with similar requests in the future.