It's called NAND mirroring, and it requires copying part of the iPhone's memory. Right now, the iPhone will wipe itself clean after 10 wrong passcodes. But with a copy of the phone's flash memory, the FBI can just keep restoring the data.
"It can then retry indefinitely," wrote ACLU technology fellow Daniel Kahn Gillmor.
Gillmor wrote about NAND mirroring earlier this month, but that's when the FBI was publicly focused on forcing Apple to write a new version of the phone's operating system that would let it try unlimited passwords. Now Gillmor's theory is looking like the FBI's best bet. It wouldn't be as fast as a simple "brute force" effort password guessing, but it wouldn't require Apple's help."
How the hell could the FBI hack into that iPhone? - CNET