INDONESIA, 20/11/2024 (Asia News Channels) - Apple Inc. has reportedly proposed an investment of nearly $100 million in Indonesia in an attempt to lift the country’s sales ban on its iPhone 16 model. According to sources familiar with the discussions, the offer marks a significant increase from the US tech giant’s earlier plan of $10 million.
The proposed investment, spread over two years, would target Indonesia's manufacturing sector, with previous plans including a factory for accessories and components in Bandung, southeast of Jakarta. However, the Ministry of Industry, which blocked the iPhone 16’s sale last month, is now pushing Apple to focus more on research and development in the country. The final decision on the updated proposal remains pending.
The ban stems from Apple’s failure to meet Indonesia’s 40% domestic content requirement for smartphones and tablets. The company has reportedly invested 1.5 trillion rupiah ($95 million) through developer academies, falling short of the 1.7 trillion rupiah commitment. A similar requirement led to a ban on the sale of Alphabet Inc.’s Google Pixel devices in Indonesia.
Last month, after Apple executives traveled to Jakarta for discussions, they were reportedly unable to meet Minister Agus Gumiwang Kartasasmita directly and instead engaged with a ministry director-general. Neither Apple nor the Ministry of Industry has commented on the matter.
Indonesia’s hardline approach, championed by President Prabowo Subianto, seeks to bolster local industries by pressuring global firms to increase domestic contributions. The iPhone 16 ban reflects this strategy, which has also seen measures like last year’s TikTok ban under former President Joko Widodo, resulting in a $1.5 billion investment by ByteDance in a joint venture with Tokopedia.
For Apple, securing access to Indonesia’s 278 million consumers, a majority of whom are tech-savvy and under 44, is critical. However, Indonesia’s aggressive tactics could deter other firms from expanding operations in the country, potentially clashing with the government’s broader goal of attracting foreign investment.
Apple’s proposed investment is likely to involve collaborations with assembly or components partners, such as Foxconn, to bolster production capabilities. It remains uncertain how the negotiations will impact Apple’s future market presence in Indonesia.
--ASIA NEWS CHANNELS