Washington: So, how's that new iPhone working for you, now that Apple's promise of secure encryption has been punctured by news that a mysterious "outside party" has cracked the phone used by the gunman in last year's San Bernardino massacre?

Apple and the FBI have been at daggers drawn over the company's refusal to crack the code, to reveal the contents of gunman Syed Rizwan Farook's iPhone 5c to investigators, the FBI's problem being that after just 10 failed attempts to bypass the phone's lock protection, its stored data ordinarily becomes inaccessible – permanently.

With a barely concealed "nah nah, nah nah nah", the FBI was back in a California court this week, explaining that it no longer required Apple's assistance. And in a jab that would have caused company founder Steve Jobs to turn in his grave, the FBI showed no inclination to reveal its fabulous secret on backdoor access to Farook's phone to Apple.

For some in this gizmo-obsessed era, the war between Apple and the FBI will be nothing more than being dudded at the mall. It now seems the phone that was sold as a lockbox for all your secrets is not all it is cracked up to be – the motoring equivalent of buying a Volkswagen and finding that it would perform as billed by the dealer only while it was illegally rigged to bypass emission controls.

But for others, much more is at stake. In the era of the Edward Snowden disclosures and all the dense complexity of his revelation three years ago of the breadth and depth of Washington's global and domestic surveillance and eavesdropping, a case that reduces it all to the privacy and security of the phone in your pocket makes this visceral for Americans.

The US Justice Department, representing the FBI, and Apple were due to face off in a California court on Tuesday last week, at which the authorities wanted orders for Apple to comply and unlock the phone.

But in a dramatic filing, the Justice Department revealed – ahem! – that maybe it no longer needed Apple's co-operation, because an unnamed outside party had seemingly revealed to the FBI how to breach Apple's much-vaunted security software.

Indicating that the FBI was testing the new method before applying it to Farook's phone, the department said that if all went well "it should eliminate the need for the assistance from Apple", which starkly contradicted its oft-stated claim that only Apple could reveal the gunman's call history, contact list, texts, physical movements and anything else that might be stored in the phone which might, or might not shed light on the December massacre, in which the Islamic State-inspired Farook and his wife Tashfeen Malik killed 14 of Farook's work colleagues at a local government facility in San Bernardino, California.

It can't have surprised Apple that the legal standoff amounted to an irresistible invitation to software engineers and cyber security experts around the globe to prove its products did not live up to the marketing hype.

Resorting to Constable Plod talk that conveyed none of the excitement of the chase, FBI Director James Comey told reporters: "The attention that has been drawn to this issue, by the litigation and by the controversy that surrounds it, has stimulated a marketplace of creative people all around the world to try and come up with ideas – lots of folk have come to us with potential ideas."

An Israeli security company, Cellebrite, has been named as the likely suspect – apparently because it struck a $US15 million deal with the FBI last week. But in a market awash with scepticism, it's also been suggested that the leaking of the name Cellebrite might just be a clever marketing ruse. Neither the FBI nor the company are commenting.

Apple has argued that abiding by a court order to reveal the data in one device could lead to many iPhones being accessed which, it claims, would breach the privacy of its customers and the strength of its product security. There were several examples from around the country – including a reported 175 cases in Manhattan alone – of local investigators maneuvering to share the FBI's back-door access to the phone.

The pause in the legal stoush that has been billed as a clash of titans, Silicon Valley v the Federal Government, is expected to be just that – a pause. "This will only delay an inevitable fight over whether the government can force Apple to break the security of its devices," American Civil Liberties Union lawyer Alex Abdo told The New York Times.

To that end, neither side particularly wants the Farook case to go away – the simplicity of arguing about one man's phone was perfect for Washington's campaign to drive a debate on how far it should be allowed to go in demanding trade-offs between personal privacy and investigating terrorism in a post-Snowden world; that simplicity also appealed to Apple and Silicon Valley in general.

In a conflict in which there have been few gestures of good will, Comey did write in a post at the national security blog Lawfare in February that this clash could not be resolved by a corporation that made things to sell for a living, or an agency that investigated things for a living. "It should be resolved by the American people deciding how we want to govern ourselves in a world we have never seen before," he writes.

The issue deeply divides Americans – according to a Wall Street Journal/NBC News poll, 42 per cent of respondents argued that Apple was obliged to help the authorities; 47 per cent argued the tech giant should not co-operate. More broadly, a 2014 Pew Research poll found 90 per cent of respondents shared a belief that consumers had lost control of the collection of their personal data.

Early in March US President Barack Obama backed the spooks, warning against "fetishising our phones above every other value". The president argued that using technology to block access to a smartphone was akin to blocking the police from searching a house for evidence of child pornography.

Obama told the techie South by Southwest conference in Austin, Texas: "You cannot take an absolutist view on this – if your view is strong encryption no matter what and we can and should produce [inaccessible] black boxes, that does not strike the balance we've lived with for 200 or 300 years."

If there was no way to gain access to new communications devices, Obama asked, "how do we solve or disrupt a terrorist plot? What mechanisms do we have to even do things like tax enforcement … if government can't get in, then everyone's walking around with a Swiss bank account in their pocket?"

These are tricky questions, hinging on the Fourth Amendment rights of Americans. Reasonable, warranted searches are allowed of people's cars, homes and offices; but on Apple's reading of the law as it applies in the digital era, Silicon Valley and criminals and terrorists should be beyond the law.

Setting out a traditional law enforcement exercise, The New Yorker wrote: "Law enforcement agencies, in seeking to protect the public, also have a vital job to do and they have long had the right to violate people's personal space, with a court's approval. For example, in searching for incriminating evidence, they can, given a suitably tailored warrant, break down the front door of a person's home, rip apart walls and floors and rifle through personal possessions.

"They can also make landlords assist them in gaining entry. In the San Bernardino case, the FBI effectively argues that a mobile phone isn't much different from an apartment, and that Apple isn't much different from a landlord."

Writing on the hacking blog Hackaday, self-described nerd author Elliot Williams argues that the FBI claim that this was a dispute about just one phone had no credibility – "we don't believe that for a second. The Farook case was intended to capitalise on the public's fear of terrorism and to force Apple to play along and to take actions that harm all of their customers.

"The FBI will be trying to establish precedent to compel decryption again, and will try until they find a judge to agree with them."

But if that sounds like hackers running amok, former Clinton and Bush National Security Adviser Richard Clark told National Public Radio: "If I were in the job now, I'd have simply told the FBI to call Fort Meade, the headquarters of the National Security Agency, and NSA would have solved this problem for them. They're not as interested in solving the problem as they are in getting a legal precedent.

"Every expert I know believes that NSA could crack this phone. They want the precedent that the government can compel a computer device manufacturer to allow the government in."

In this case the FBI was not entirely helpless. Because Farook's employer owned the phone, investigators had details of all the calls he had placed and possibly his saved messages. And Apple chief Tim Cook acknowledged that Apple had also provided a "cloud backup and some other metadata" to the FBI.

But Farook's contact list apparently remained elusive and the FBI suspected that some data was missing from the backup provided by Apple, because Farook apparently had changed his password and in so doing, might have disengaged the phone's automatic iCloud backup function.

Apple reportedly is prepared to risk being in contempt of court by ignoring any order to co-operate with the government and there is speculation that even if the company agreed to co-operate, its software engineering staff would refuse to do so.

Arguing its case in a court filing last week, Apple charged: "The government seeks to commandeer Apple to design, create, test and validate a new operating system that does not exist, and that, Apple believes – with overwhelming support from the technology community and security experts – is too dangerous to create."

On another level, the company that earned more than $US50 billion in 2015, argues a fascinating freedom-of-speech line. As explained by The New York Times, it goes like this – computer code, even a code written to scramble a digital conversation, is a form of free speech and for a government or a court to order people to write a code is no different to telling them what to say.

Showing remarkable restraint, an unnamed Apple executive told reporters that Apple wanted to know more about the so-called outside party claiming it could crack the iPhone, so that it would know just how its security might be bypassed.

The technology website Motherboard speculates that the mystery outside party is one of a breed of super hackers who on discovering what's called a "zero day", a way through proprietary software, which they offer for sale to intelligence agencies and others with an interest in outflanking the likes of Apple.

But Motherboard then defers to iPhone forensic expert Jonathan Zdziarski who in a recent blog suggested an alternate method – a process of "mirroring" the iPhone's NAND flash memory, effectively cloning the iPhone's memory.

Motherboard explains: "This way, the FBI could make several passcode attempts, then avoid the auto-erase mechanism by simply flashing the original image back on to the chip, [thereby] resetting the number of attempts the system has detected …[and so] would allow the government to make an infinite number of passcode guesses without worrying about the device being wiped."

Maybe Zdziarski is more easily understood. He says: "This technique is kind of like cheating at Super Mario Bros with a save game, allowing you to play the same level over and over after you keep dying – only, instead of playing a game, they're trying different PIN combinations."

The FBI has poked a stick in Apple's eye. But the debate is far from resolved. Justice Department spokeswoman Melanie Newman was strident in a statement: "it remains a priority for the government to ensure that law enforcement can obtain crucial digital information to protect national security and public safety, either with co-operation from the relevant parties, or through the court system when co-operation fails.

"We will continue to pursue all available options for this mission, including seeking the co-operation of manufacturers and relying upon the creativity of both the public and private sectors."

Seems that Richard Clarke's reading of what's happening here is quite accurate.

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