Apple Plans Additional Investment in Indonesia to Lift iPhone Sales Ban

In an attempt to reverse Indonesia’s latest ban on iPhone 16, Apple Inc. has offered to boost its investment in the country to nearly $ 10 million. The investment would be made to create an Apple affiliate plant in Bandung and to incorporate local supply chain resources to manufacture accessories and parts for Apple’s devices. This proposal will respond to Indonesia policy that requires that at least 40% of the value of a Smartphone should be locally sourced before it is sold in Indonesia.

Apple’s plan, still pending with the Ministry of Industry in Indonesia, could be preparation to enter Indonesia’s growing market of nearly 278 million youngsters with affinity for tech gadgets. Although merely $10 million may not be a big amount for Apple, it means much to local parties as it can help the company remain in one of the biggest Southeast Asian markets.

Indonesia’s decision to blacklist the iPhone 16 is symptomatic of the move being spearheaded by the government of president Prabowo Subianto to compel foreign manufacturers to raise local production. Apart from Apple, Alphabet’s Google Pixel phones likewise remain banned from sale due to similar domestic content concerns. 

This approach, however, has created some concern in a perception that while implementing the policy of encouraging the production of local products, the move may scare off some firms in Indonesia. Not even companies that have been doing business in Indonesia such as LG Electronics have been able to escape the odds when it comes to importing some of the components that it uses in its operations.

Previously, Apple’s investment in Indonesia has been limited to initiatives such as developer academies, totalling approximately $95 million — slightly below the nation’s expectation of $100 million. The proposed Bandung facility could help bridge this gap and align with Indonesia’s manufacturing goals.

This push for local production echoes similar policies from the previous administration under Joko Widodo. In 2023, Indonesia banned ByteDance’s TikTok for low domestic content in retail offerings, which later led to ByteDance investing $1.5 billion in a joint venture with Tokopedia, part of the Indonesian tech giant GoTo Group.

While Indonesia’s stance could benefit local industries, there’s also a risk of discouraging new investors who might otherwise see Indonesia as a strategic alternative to China. As the government continues to impose import curbs on products ranging from MacBooks to automotive parts, some businesses are voicing concerns over logistical challenges and increased costs associated with meeting these requirements.

For now, Indonesia’s Ministry of Industry is expected to make a decision on Apple’s proposal soon. Should Apple’s investment be accepted, it could mark a significant development in the tech giant’s ongoing relationship with the Indonesian market.