The investment of 100 million USD does not satisfy Indonesia's sales ban on Apple's iPhone 16 series
The Indonesian government expressed dissatisfaction with Apple's proposed investment of $100 million, stating that the investment does not align with the principle of "fairness," resulting in the continued validity of the sales ban on the iPhone 16 series. The Minister of Industry pointed out that Apple's investment in Indonesia is significantly lower than its investments in other countries and does not meet local content requirements. The government hopes that Apple will increase its investment and send a negotiation team to seek the lifting of the ban
According to the Zhitong Finance APP, a senior government official in Indonesia stated that Apple's proposal to invest $100 million in Indonesia does not meet the principle of "fairness," indicating that the country's government is seeking further negotiations before lifting the ban on the sale of the domestic iPhone 16 series.
Minister of Industry Agus Gumiwang Kartasasmita said on Monday that this investment amount is lower than what the American tech company has invested in other countries.
For example, Apple has invested over 244 trillion rupiah ($15 billion) in manufacturing facilities in Vietnam, but Apple's total market sales in Vietnam are only about 1.5 million units. In contrast, Apple's investment in its developer academy in Indonesia is only about 15 trillion rupiah, while its total market sales in Indonesia are approximately 2.5 million units.
The latest remarks indicate that Apple faces more obstacles in seeking to lift the sales ban on its flagship product, the iPhone 16, in Southeast Asia's largest economy. The minister added that competitors such as Samsung Electronics and Xiaomi have invested 80 trillion rupiah and 55 trillion rupiah, respectively, in domestic production facilities.
Kartasasmita stated, "We hope Apple can return here to conduct business, but we need a fair solution."
The Indonesian government has banned the sale of the iPhone 16 on the grounds that Apple has not met the localization requirements for smartphones and tablets.
The minister stated on Monday that Apple's investment in Indonesia is 15 trillion rupiah, which is lower than the 17 trillion rupiah it promised in 2023, with a shortfall of about $10 million, "which is too small." To lift the sales ban, Apple proposed an additional investment offer of $100 million.
Kartasasmita said, "We hope Apple will send a negotiation team to meet with us."
The government's requirements include that the American tech giant fulfill the remaining $10 million of its promised investment from last year and provide better offers for 2024-2026. The minister added that their top priority remains to have the company establish a factory in Indonesia.
The ban is the latest example of Indonesia's tough stance, as the new president Prabowo Subianto attempts to pressure international companies to promote local manufacturing, which would benefit domestic industries. Due to a lack of investment, the country has also banned the sale of Google Pixel phones.
Although Apple does not rank among the top six smartphone brands in Indonesia, the country is a potential growth market due to its young population and increasing technological proficiency. Government data shows that this $1 trillion economy has over 350 million active mobile phones, exceeding the country's population of 270 million.
Kartasasmita stated, "We expect the Apple issue to be resolved soon, as they also have a strong interest in doing business here."