It is reported that Apple will invest nearly 10 million dollars in Indonesia to lift the iPhone sales ban
Apple proposed to invest nearly $10 million in Indonesia to lift the sales ban on the iPhone 16. The plan includes collaborating with suppliers to establish a factory in Bandung to produce accessories and components. The Indonesian Ministry of Industry is reviewing the proposal and is expected to make a decision soon. This ban is part of the Indonesian government's efforts to protect local industries, and Apple does not have independent factories in Indonesia, primarily relying on local suppliers. Although the investment amount is relatively small, it may impact the business expansion of other companies
According to informed sources, Apple (AAPL.US) has proposed to invest nearly $10 million to produce more products in Indonesia in an effort to lift the ban on selling its latest iPhone in the country.
The sources indicated that the plan will involve Apple collaborating with its list of suppliers to invest in a factory in Bandung, southeast of Jakarta. The factory will produce components and accessories for Apple devices.
Apple has submitted a proposal to Indonesia's Ministry of Industry, which last month blocked the sales license for the iPhone 16, citing that the local division of the American tech giant did not meet the 40% local content requirement for smartphones and tablets.
The sources stated that the Ministry of Industry is reviewing the proposal and is expected to make a decision soon. This proposal has not been finalized and may be subject to changes.
Apple did not respond to requests for comment. The Ministry of Industry also did not respond to requests for comment.
It is understood that the ban on the iPhone 16 in Indonesia is the latest example of President Prabowo's government pressuring international companies to protect domestic industries and urging multinational companies to boost local manufacturing. Due to a similar lack of investment, this Southeast Asian country has also banned the sale of Google (GOOGL.US) Pixel phones. These measures are a continuation of similar strategies used by former President Joko's administration.
Apple does not have any independent factories in Indonesia; like most multinational companies, Apple collaborates with local suppliers to produce components or finished products. For Apple, an investment of nearly $10 million is a relatively small price to pay for greater access to Indonesia's approximately 278 million consumers, more than half of whom are under the age of 44 and tech-savvy.
While Indonesia may view Apple's additional investment (if it occurs) as a victory, its tough stance could deter other companies from expanding their operations or establishing a footprint. This could also jeopardize Prabowo's goal of attracting foreign investment to grow the economy and fund policy expenditures.
According to the Indonesian government, Apple has only invested 15 trillion Indonesian rupiah (approximately $9.5 million) in Indonesia through its developer academy, far short of its promised 17 trillion rupiah. Officials have also demanded that e-commerce companies Tokopedia and TikTok shut down sellers of the iPhone 16 on their platforms, or face legal action.
Indonesia has previously implemented similar trade policies.
Earlier this year, the government imposed import restrictions on thousands of products, from MacBooks to tires to chemicals, to force foreign companies to expand their manufacturing scale. However, this move has sparked a backlash in the business community, including from companies like LG Electronics, which has long had manufacturing operations in the country and complained about being unable to import certain components to manufacture washing machines and televisions.
Despite Indonesia's repeated calls for international companies to boost manufacturing development, its local industry has been gradually declining. The manufacturing sector's share of GDP fell from 21.1% in 2014 to 18.7% last year