Indonesia has received a substantial investment proposal from Apple Inc. to lift a ban on iPhone 16 sales. The government announced that Apple would need to invest $1 billion, significantly increased from its earlier offers. The situation stems from the company’s failure to meet local content requirements, which led to the prohibition of iPhone 16 sales in Indonesia, the largest economy in Southeast Asia. Investment Minister Rosan Roeslani expressed the government’s desire for a written commitment from Apple within a week, according to a Bloomberg report.
Apple proposes $1 billion investment to resume iPhone sales in Indonesia
The $1 billion investment represents a tenfold increase from Apple’s last offer of $100 million, with its initial proposal being a mere $10 million for a factory producing accessories near Jakarta. Roeslani emphasized the need for fairness, stating, “You get benefits here. You invest here and create jobs.” If Apple complies, it could open up opportunities for local manufacturing, similar to commitments made by competitors like Samsung and Xiaomi.
Indonesian industry officials have pressured Apple to surpass its investments in neighboring Vietnam, where the company has reportedly invested around $15 billion. Roeslani stated, “Their investment must be bigger.” As part of its previous commitments, Apple pledged $107 million for developer academies in Indonesia but fell short by approximately $10 million. This prompted the government to seek further investments, particularly for local production capabilities that could stimulate job creation and economic growth.
Since October 2024, the sale of iPhone 16 models has been barred, impacting Apple’s overall sales in the region. Representatives from Apple have not publicly responded to the government’s demands or the implications surrounding the investment requirement. The investment is crucial for Apple, which shipped around 2.9 million iPhones to Indonesia in 2023, and the number is projected to rise.
Investments in Indonesia’s tech industry often come with stringent conditions, as the government aims to reduce dependence on imports and enhance local manufacturing capabilities. In recent years, Indonesia has demanded companies to invest more substantially in the country while seeking measures to protect domestic sectors. For example, ByteDance’s TikTok has been compelled to separate its shopping feature from its social media platform to safeguard its retail industry from cheaper Chinese imports.
Industry Minister Agus Gumiwang Kartasasmita highlighted the urgency of locating a local manufacturing facility for Apple, reinforcing the expectation that it should follow the model set by other global phone manufacturers. He noted that local production would undoubtedly trigger further investments across various sectors, with Roeslani adding, “The most important thing is that the global value chain will move to us.”
As the deadline for Apple approaches, it remains unclear what steps the tech giant will take.
Featured image credit: Medhat Dawoud/Unsplash
