Apple vs FBI. What’s happening?

Starting with iOS 8, Apple started using device encryption system.The device is encrypted by using a key derived from the Device Unique Identfier (UID)
The UID of each device is randomly assigned at manufacture time and Apple does not keep copies of those keys.

The key itself is encrypted based on the user passcode.
If you incorrectly guess the passcode, the iPhone eventually inserts forced delays between attempts that increase in time with each attempt until 10 failed attempts.
After 10 failed passcode attempts, the operating system locks the phone and doesn’t let you guess anymore. There is a user-set option to destroy the key after 10 attempts. The FBI has no way of knowing if that is set.
So the FBI is stuck.

The FBI has demanded that Apple to create special code that can be forced into the phone that will allow them to:
- Remove the delays between guesses
- Allow an unlimited number of guesses
- Provide a way to automate the guessing process without the touchscreen

So why doesn’t the FBI write the code themselves?
The iPhone will only run code “signed” by Apple. Apple has a secret code that they use to “code sign” their operating system so that only code from Apple can run on an iPhone. This feature prevents malicious third parties from running malware on the phone. Can this be bypasses? Yes, but the device has to be jailbroken for that and from what I think only 5–7% of the people actually jailbreak their phones.

Apple is doing the right thing protecting the users from the government.