My understanding is that when the story went public, Apple went into "Protect the Brand" mode.
Seems to be more of a Political Grandstanding issue, than a legal precedent.
I don't think it's an either-or issue. I think they overlap in this case.
Apple has spent bazillions to be a leader in security. Their iPay function is a leap forward in both convenience and security. I was skeptical until I learned the security of iPay is head-and-shoulders above that of a credit card. Security is rapidly becoming a pillar of their brand.
The phone in question is a basic 5C. No fingerprint reader. All other models of 5, and all subsequent iPhones have the fingerprint reader. If the terrorist phone had the fingerprint reader, it is my understanding that hacking would simply not be possible. That means the govt has no ability to hack any new/current iPhone. A court ruling against Apple would torpedo every current product. So yes, it is about protecting their brand.
As a consumer, I support that security. The govt can still listen to every call. They can read every email. They can retrieve anything on the cloud. They can track my internet usage. They can see my credit purchases. They can search and seize any physical item in my home. So what's left? My contacts, notes and pictures on my phone? It seems the only thing the govt can't get is stuff I enter or input into my phone without benefit of the net or phone network.
Our privacy has eroded in so many ways. I'd like to retain one bastion of privacy, and appreciate Apple's efforts.
As far as terrorists are concerned, until the govt starts taking serious action to prevent them from entering our country, their Monday-morning reactions are the real Political Grandstanding.