Apple still barred from selling iPhone 16 in Indonesia despite investment deal, says minister
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Apple could be sanctioned for its continued non-compliance with local investment rules, though that would be the government’s last resort.
PHOTO: REUTERS
JAKARTA - Apple still cannot sell its iPhone 16 in Indonesia despite striking a deal to build a local production facility there as it has not met domestic content rules, the industry minister said on Jan 8.
Indonesia banned iPhone 16 sales in 2024
Delays in the resumption of sales is depriving Apple revenue from a promising growth market of about 280 million consumers, where it is fighting for foothold with rivals such as Samsung Electronics.
Industry Minister Agus Gumiwang Kartasasmita said Apple had struck a deal to build a facility producing its AirTag tracking device on Indonesia’s Batam island, close to Singapore, but that still would not count as a locally made iPhone part.
“There is no basis for the ministry to issue a local content certification as a way for Apple to have the permission to sell iPhone 16 because (the facility) has no direct relation (to the phone),” he said, adding the ministry would only count phone components.
According to Mr Agus, Apple could be sanctioned for its continued non-compliance with local investment rules, though that would be the government’s last resort.
“We will look for other ways or options,” he said, adding that the government has already sent a counter proposal to Apple.
An Apple representative in Indonesia declined to comment.
The decision marks an unexpected turn just hours after Investment Minister Rosan Roeslani told reporters on Jan 7 evening that Indonesia had approved Apple’s plan to put up an AirTag facility.
The domestic content requirements are under the purview of the industry minister.
Apple had proposed to build a factory worth US$1 billion (S$1.37 billion), and it would start operations by early 2026 and begin production of AirTags, a device that allows users to track their luggage, pets or other belongings, according to Mr Rosan.
Company executives are in Jakarta to negotiate with the government on the investment proposal.
Rival phone makers like Samsung and Xiaomi have set up factories in Indonesia to comply with the domestic content regulations, introduced in 2017.
Other ways to boost local content include sourcing materials, hiring workers, developing apps and investing in developer academies in the country.
Mr Agus, who held two days of meetings with Apple’s vice-president of global government affairs, Mr Nick Ammann, said Apple had proposed “innovative investment”, which Indonesia had countered.
“There’s no deadline for compliance,” Mr Agus said. “If Apple wants to sell the iPhone 16, and especially if it plans to launch the iPhone 17, the decision is entirely up to them.”
Apple has no manufacturing facilities in Indonesia, a country of about 280 million people, but has since 2018 set up app developer academies. REUTERS, BLOOMBERG
