Apple, about four months ago, was faced with a challenging process in the country with the prohibition of the sale of iPhone 16 series devices in Indonesia. The Indonesian government has strict investment rules that require that at least 40 percent of the smartphones sold in the country consist of locally produced components. Apple was banned because it could not fulfill these rules. However, according to Nikkei Asia’s new news, the technology giant is currently conducting negotiations with its suppliers to establish iPhone production lines in Indonesia.
This process between the Apple and the government of Indonesia began in October 2023. Indonesia banned the sale of iPhone 16 series and Watch 10 models in the country, citing that Apple did not fully fulfill its investment commitments. Apple has committed a $ 109 million R & D investment in Indonesia, but only $ 95 million of this investment was completed.
The company announced that it would establish a factory in the Bandung region to remove the sales ban and will invest an additional $ 10 million. This factory is planned to be used in the production of Apple accessories and some components. However, these steps were not sufficient by the Indonesian government and the sale ban continued.
Apple has decided to increase its investments to meet the demands of the Indonesian government. The company announced that it will invest an additional $ 1 billion in the country. As part of this investment, a new factory is planned to be established for the production of Apple Airtag on Batam Island. The new facility aims to meet 20 percent of the worldwide Airtag production. In addition, the increase in the financing of the production facility in Bandung is on the agenda.
Apart from the Apple iPhone 16, it can also produce accessories in Indonesia
Indonesian Investment Minister Roosan Rooslani said Apple has approved this new investment plan. However, Industry Minister Agus Gumiwang Kartasasmita said that the production of Airtag and accessory does not meet the necessity of a 40 percent local component for iPhones and therefore the ban will still continue.
Apple’s presence in Indonesia is currently limited only to application development academies. The company does not have a production facility in the country. However, Apple has to re -evaluate local production and investment strategies to protect and expand its market.
Indonesia is the largest economy in Southeast Asia with its exceeding population of more than 280 million and GDP exceeding $ 1 trillion. The country has close to 350 million active mobile phones. This means a big market potential for smartphone manufacturers.
Analysts say that Indonesia’s strict local production requirements are applied to attract more investment from foreign technology companies. With this strategy, the country aims to strengthen its economy and create more employment in the technology sector.