Apple's claim is that they cannot provide the contents of the phone and that they'd have to write something to do so.
Listen I have followed Apple since the 1980s and Apple after Steve Jobs 2.0 "claimed" a lot that turned out to be bull****. Apple 2.0 as I call it turned into an evil company inspired by NeXT.
Apple has been caught in false claims many times. We have antennagate which Apple claimed that there was nothing wrong and people were holding it wrong, to my favourite on the Mac Book Pro graphics card that was clearly faulty but Apple claimed it was not, and then 2 years later admitted it and made a recall, well knowing that most people had bought a new one and discarded the old broken one.
Or there was of course the Frapping, where 99% of the images were taking from iOS devices and the most likely culprit was iCloud security. To this day, Apple claims that it was the 10+ celeberties that all had poor passwords... yea right.. the tech world had been complaining for years over the poor security on iCloud and Apple is still sticking to this?
Or the latest recall by Apple.. chargers. For years we heard about iPhones and chargers blowing up basically and each time the Apple marketing team claimed it was 3rd party "China" charger and wire that was the problem, despite many saying it was not. Then suddenly a few weeks ago.. recall!
So Apple claim a lot of things but they can not be trusted.
The court is ordering them to do so and Apple's claim is that once they do so it becomes possible - probable - that they technique they used will get out into the world and the security of all iPhones, however strong or poor that might currently be, will be compromised.
And that is horse****. Chances are the "weaknesses" they are talking about are already being exploited, but the US legal system cant use them for legal reasons. iOS is by FAR the most problematic security wise on known security holes. Not long ago, Apple left a massive hole in their App store go unpatched for over a year.. and that lead to malware being put on peoples phones. They claim it was only jailbroken phones at first, but then suddenly they started removing thousands of apps... ups!
Remember the Frapping? That picture collection happened over years by many people, so the exploit was known by the hacker world and they used it. Apple did nothing.
Another example.. Remember Google getting fined for exploiting a bug in Safari to change the security settings? Well that bug was well know for 2 years by people in the industry and had been reported many times to Apple. Google was far from the only one exploiting the bug. Apple did NOTHING for 2 years.. and yes Safari was updated many times in those 2 years.
It may well be a self serving stance on their part but that doesn't invalidate their basic argument.
Their argument is hollow. They could just get the data off the device in a secure clean room where no one else has access to the "device" that cracks the phone. This room could be as secure as Fort Knox. They would not have to give the method to the Feds or anyone.. it would remain in the hands of a select few within Apple. You entrust your nuclear codes to a select few, but Apple cant do this? seriously?