Apple Strikes $10 Million Deal to Unshackle iPhone 16 Sales in Indonesia
Apple Inc. has proposed an investment of nearly $10 million in Indonesia in a bid to lift the ban on selling its latest iPhone 16 series in the country. The proposal, submitted to Indonesia's Ministry of Industry, involves collaborating with suppliers to establish a production facility in Bandung, located southeast of Jakarta. This facility is planned to manufacture accessories and components for Apple products.
The background to this move is the Indonesian government's decision to block sales of Apple's newest smartphone model. This action was taken because PT Apple Indonesia did not meet the regulatory requirement that smartphones incorporate at least 40% local content. The government is currently reviewing Apple's proposal, and a decision is anticipated soon, though the plan is yet to be finalized and might change.
Indonesia's stance on such matters is part of an ongoing effort to enhance local industries by pressing international companies to increase their domestic investments. This is not an isolated case; a similar approach was recently applied to Google's Pixel phones. These policies originate from strategies employed by previous administrations aiming to protect local markets and boost local manufacturing.
For Apple, making this investment is considered a small price to pay for greater access to Indonesia's consumer market, which is home to approximately 278 million people, more than half of whom are tech-savvy individuals under the age of 44.
While the Indonesian government may herald Apple's potential investment as a triumph in policy implementation, this hardline approach risks deterring other companies from scaling up their operations in the region, particularly those considering relocating from China. Moreover, such tactics might even conflict with the broader objective of luring foreign investments crucial for the country's economic expansion.