In an open letter posted on Apple's website last night, CEO Tim Cook said that the company's redesigned its mobile operating system to make it impossible for Apple to unlock a user's iPhone data. Starting with iOS8, only the user who locked their phone can unlock it.
This is huge. What it means is that even if a foreign government or a US police officer with a warrant tries to legally compel Apple to snoop on someone, they won't. Because they can't. It's a digital Ulysses pact.
Law enforcement has a variety of legal tools it can use to compel a tech company to turn over data on its users. In some cases the tech company is even legally prohibited from talking about those requests publicly. If Apple's correct and it truly has built an encryption system that they themselves can't break, then they've found a pretty ingenious workaround to the problem tech companies face constantly -- of being stuck having to choose between their users and the law.