Alright so here's the deal:
-The FBI wants into the work phone of Syed Farook, one of the terrorists that was part of the San Bernardino attacks.
-They can't get into the phone because it's got a passcode and could very well wipe all data after 10 failed attempts, which is a setting you can turn on in iOS. The FBI doesn't want to take that risk.
-They went to the court and got a magistrate to basically use the
All Writs Act on Apple in an attempt to compel them to create an entirely new version of iOS that they could then use to have an unlimited number of passcode attempts which they could run through a computer to unlock the phone in short order.
-Apple CEO Tim Cook refused,
publishing a letter on the Apple website talking about the dire implications if Apple gave in to this order. They most likely plan to appeal.
-Privacy advocates and tech companies alike are standing with Apple on this. The courts forcing Apple to do this could set a precedent that the government could compel any tech company to essentially code malware that bypasses their own security software. The potential consequences of that software leaking to the public (as lots of tech stuff is wont to do) would be dire.
I understand Apple is definitely doing this to protect their bottom line as well, because if their products are insecure then fewer people will buy them. But this is one of those cases where good business sense and doing good are actually one and the same.