Apple Struggles to Meet Indonesia's Local Content Rules: iPhone 16 Sales on Hold

Indonesia's Minister of Industry announced on Wednesday that, despite Apple's agreement to set up production facilities in the country, the tech giant is still prohibited from selling its iPhone 16 due to failing to meet local content standards. Last year, Indonesia banned the sale of the iPhone 16 as Apple did not meet the requirement that at least 35% of smartphone components sold domestically are locally manufactured.

An official from the Indonesian Ministry of Industry stated that they will meet with representatives from Apple on Tuesday to discuss the company's investments in Indonesia, which are crucial for the U.S. tech giant to begin selling the latest iPhone 16 in the country. Febri Hendri, a spokesperson for the ministry, mentioned that Apple's senior officials will arrive for negotiations regarding unmet investment commitments and Apple's proposals. Indonesia had previously announced that Apple intended to invest $1 billion in a manufacturing facility to produce components for smartphones and other products, although details are still being finalized.

Despite Apple's intentions, the company currently lacks production facilities in Indonesia. Since 2018, Apple has established an application developer academy in the country, indicating its long-term ambitions for growth in this region. The Indonesian government has required Apple to renew its investment commitments every three years, with its latest $10 million pledge having expired in 2023.

To align with local content requirements, Indonesia is actively seeking a new investment commitment from Apple for the period of 2024 to 2026. The government asserts that Apple plans to invest in setting up a factory focused on producing components for smartphones and other electronics, though comprehensive specifics are still under discussion.

As of the current moment, Apple has not made any official comment regarding the scheduled meeting or its investment strategies. This engagement is significant not only for Apple's operational future in Indonesia but also as part of the Indonesian government's broader strategy to enhance its local manufacturing sector and attract foreign investments.