In a move that was expected to appease Indonesian officials and lift the ban on iPhone 16 sales, Apple's plans to build an AirTag factory in Batam have fallen short. Despite the company's investment commitment and job creation promises, the Indonesian government has yet to lift the sales ban, leaving Apple's iPhone 16 launch in the country uncertain.

Apple's AirTag factory, which was approved by Indonesian officials in January 2025, was expected to produce 20% of the global AirTag supply and employ around 1,000 people. However, the factory's production of AirTags, which are not considered essential components for smartphones, has not been enough to satisfy Indonesia's local content requirements. The country mandates that at least 40% of smartphones sold domestically should comprise locally-made parts.

Indonesian Industry Minister Agus Gumiwang Kartasasmita has stated that the AirTag factory does not directly contribute to the local content certification for iPhone 16 sales. He emphasized that the ministry would only issue a local content certificate for Apple products if the company could demonstrate that at least 40% of the iPhone's components were manufactured domestically.



Apple has been negotiating with Indonesian officials to meet the local content requirements, with discussions ongoing as of January 2025. The company has offered to increase its investments in Indonesia, including a $1 billion commitment that includes the AirTag factory. However, Indonesian officials have not yet approved the proposal, and the iPhone 16 sales ban remains in effect.

Indonesia's investment minister, Rosan Roeslani, has stated that Apple is fully committed to investing $1 billion to build the AirTag factory on Batam island. The factory is expected to start operations in 2026 and supply 65% of the global AirTag supply. However, it is unclear if the deal on the factory in the industrial zone has been signed.



The iPhone 16 sales ban in Indonesia has significant implications for Apple's revenue, as the country is a substantial market with over half of its 278 million residents under the age of 44. The ban, which was implemented in October 2024, has led to a decrease in iPhone sales in the country, as customers have been unable to purchase the latest models legally.

Apple has been working to address the local content requirements and lift the sales ban, but negotiations with Indonesian officials have not yet resulted in a resolution. The company's plans to build an AirTag factory in Batam have not been enough to satisfy the Indonesian government's demands, leaving the iPhone 16 launch in the country uncertain.

As Apple continues to negotiate with Indonesian officials, investors and customers alike await the outcome of the discussions. The company's ability to meet the local content requirements and lift the sales ban will have a significant impact on its revenue and market share in the Indonesian market.