Worst case, you generate a suitably robust key that is used for authentication and encryption, and you provide a means to export it and back it up however you want without sending it to any third party. You can still use all the snazzy secure enclaves and facial recognition and so on to protect a copy of that key that is held on each of your personal devices to enable easy but reasonably secure access, but the underlying technology is tried and tested, it does not have the lock-in problem, and it does not require data in iCloud to be accessible to anyone but the keyholder.

Also note that this needn't necessarily be mandatory. If users are OK with trusting Apple, they could still use the current approach. But if you're going to claim to be a strong supporter of privacy and security, you should really have at least the option for proper encryption of everything for those people and businesses that want it.

I think the secure enclave is the winning technology - whilst not everyone has to have a smartphone in the brave new digital world,everyone will have to have at least one secure enclave (HSM probably tied to biometrics)

___ have your ____, and as long as they have those ____, they can be compelled to ____ it under lawful government order.