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Context: Very often, law enforcement uses iCloud backups to recover data like texts and files from iOS devices. These backups are on by default. The backups are encrypted, but Apple has the key, so they can fulfill these requests. In the San Bernardino iPhone case, the FBI locked out the iCloud backup somehow (by resetting the password, I think), and are now trying to use the secondary method of getting the data from the phone's hardware. It's likely that this lockout was intentional.

What apple wants to do here is change the encryption keys used for backups so that Apple/law enforcement cannot read them.