When PhoneView accesses a device that has the iTunes Encrypted Backup feature enabled, it will receive certain data in encrypted form. If PhoneView doesn't have the encryption password available, it will prompt you for it.
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Note that this password is separate from, and could be different than your Mac's admin password, your Apple ID password or your lock screen passcode. It would have been specified when you checked the "Encrypt iTunes Backups" checkbox in your iPhone's settings in iTunes.
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If you're not sure what it is, there's a chance it may be stored in your Mac's Keychain app:
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1) Open Keychain, which is in Applications/Utilities
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2) Search for "iphone backup"
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3) If you find it, double-click, then click "Show Password".