Appearing at an annual tech festival in the Texas capital, Obama delivered his most extensive comments to date on an issue being played out in federal court.
Apple, one of the world's largest technology companies, is challenging the government's request that it help the FBI access data on a cellphone that was used in the San Bernardino, California, attack that killed 14 people.
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Obama restated his commitment to strong encryption but also raised the question of how would authorities catch child pornographers or disrupt terrorist plots if smartphones and other electronic devices are designed in ways that keep the data on them locked away forever.
"My conclusion so far is that you cannot take an absolutist view on this," Obama said.
"So if your argument is strong encryption, no matter what, and we can and should, in fact, create black boxes, then that I think does not strike the kind of balance that we have lived with for 200, 300 years.
"And it's fetishizing our phones above every other value. And that can't be the right answer," he said.
At the end of a nearly hour-long, question-and-answer session with Evan Smith, CEO and editor in chief of The Texas Tribune, Smith asked the president "where do you come down" on the privacy versus security debate. He was not asked to comment on the dispute with Apple.
Obama said government shouldn't be able to "just willy nilly" access smartphones that are full of very personal data.
But at the same time, while asserting that he's "way on the civil liberties side," Obama said "there has to be some concession" to be able to get the information in certain cases.
Apple and the federal government are embroiled in a legal fight over Apple's refusal to help the FBI access the iPhone used in San Bernardino.
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