In October 2024, news emerged that Apple faced a ban on selling its iPhone 16 models in Indonesia. The country’s regulations demand that 40% of the components used in devices sold locally are sourced from Indonesia. Apple’s certification has expired, and to renew it, the company must strike deals with local manufacturers, create an app in Indonesia, or develop an innovation scheme.
Investment shortfall sparks further challenges
Adding to Apple’s hurdles is a missed investment commitment. The tech giant previously pledged to invest 1.71 trillion rupiah (€102 million) in Indonesia. However, as of now, Apple has only contributed 1.48 trillion rupiah (€88 million), leaving a shortfall that has compounded its inability to sell any of the iPhone 16 models in the country.
Apple’s local academies
To meet local requirements, Apple has established three Apple Developer Academies in Indonesia, with a fourth one announced in April. These academies aim to support aspiring app developers in the region, addressing the innovation component of the certification process.
Increased investment proposal under review
In response to the ongoing ban, Apple has proposed a significant increase in its investment. According to recent reports, Apple has pledged €93 million over the next two years—10 times its previous proposal of € 9.3 million. This investment would include plans for a factory in Bandung to produce accessories and components. While the Ministry of Industry has not yet responded, it has expressed interest in seeing Apple focus more on research and development for the iPhones sold in Indonesia.
Impacts on Indonesian consumers
Until a resolution is reached, Indonesians eager to purchase an iPhone 16 must buy it overseas, where additional import fees apply. For example, bringing a base model Apple iPhone 16 priced at € 935) from Singapore incurs a €146 import fee.
More problems
Apple isn’t the only tech giant facing scrutiny. Google has also been blocked from selling its Pixel 9 handsets in Indonesia for similar investment shortfalls. With over half of Indonesia’s 278 million population under 44 years old and highly tech-savvy, the market holds immense potential for both companies, should they meet the country’s stringent regulations.
It seems Indonesia is poised to come out on top in this battle, as manufacturers are unwilling to lose access to such a massive and promising market. The country might even succeed in pushing companies to begin local production. However, Indonesia must tread carefully to avoid overplaying its hand.
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