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>Apple supplies smart phones to the WORLD.

This has been my assumption from the start of this case too. Apple can't afford to lose China, if only for the purpose of avoiding negative quarterly growth reports. Becoming known by the Chinese to be hackable by the FBI, wouldn't go over well there.

Not to mention the (obvious, ugly) next step: every country in the world demands the exact same privileges the fbi get. And why shouldn't they?

This may not be avoidable. Even blackberry had to do this ([1], dozens more). But if anyone has strong enough market power to push governments towards privacy, it's apple.

[1] http://www.theguardian.com/technology/2010/aug/10/blackberry...

Curious, what do you make of China's demands on Apple related to the "security" of iOS and the iPhone? Why do you believe this hasn't cost Apple billions in foreign purchases?

> The FBI already has incredible insight into banking transactions. This would not be an extraordinary power for them.

So, since the FBI has that insight now, it's inconsequential for them to have it in the future? Where did you come up with this logic?