Apple raises investment proposal in Indonesia from $10 million to $100 million to lift ban on iPhone 16 sales

On October 25, 2024, the Indonesian Ministry of Industry announced that Apple is legally prohibited from selling the iPhone 16. This is due to Apple's lack of investment in Indonesia, and Apple has proposed to invest a total of $100 million (approximately 15.4 billion yen) to lift the sales ban.

Apple Offers $100 Million to Undo Indonesia's iPhone 16 Ban - Bloomberg
https://www.bloomberg.com/news/articles/2024-11-19/apple-said-to-offer-100-million-to-undo-indonesia-iphone-16-ban

Apple to increase Indonesia investment to appeal iPhone 16 ban
https://appleinsider.com/articles/24/11/19/apple-to-increase-indonesia-investment-tenfold-to-appeal-iphone-16-ban

Indonesia's Ministry of Industry announced in a statement on October 5 that distribution of the iPhone 16 is illegal because Apple has not received approval to sell the iPhone 16. 'If you have an iPhone 16 that works in Indonesia, please report it to us as this means we need to consider the device illegal,' Industry Minister Agus Gumiwan Kartasasmita said.

Indonesia has set a standard for approving smartphone sales that requires a minimum 40% 'local content rate (TKDN)' for raw materials and employment in smartphone manufacturing. In exchange for manufacturing the iPhone 16 locally and meeting the TKDN standard, Apple has promised to invest 1.71 trillion rupiah (about 16.7 billion yen) in Indonesia to create a research and development facility called the 'Apple Academy.'

However, Apple's investment so far has only been 1.5 trillion rupiah (about 14.7 billion yen), so the Ministry of Industry did not allow Apple to sell the iPhone 16 due to the lack of investment.

Indonesia's iPhone 16 sales illegal due to lack of Apple investment in the country - Officials

Bloomberg reported on November 5 that Apple has proposed investing $10 million (approximately 1.54 billion yen) in Indonesian suppliers in order to gain permission to sell the iPhone 16 in Indonesia.

However, this investment was not enough to lift the ban on the sale of the iPhone 16, and Apple has proposed to increase its investment in Indonesia by tenfold to $100 million, according to the people. According to anonymous people who spoke to Bloomberg, the Ministry of Industry has requested that it focus on smartphone research and development in Indonesia after receiving Apple's proposal to increase its investment. The Ministry of Industry has not yet made a final decision on the proposal.

After Apple first proposed to invest an additional $10 million, the Ministry of Industry reportedly invited senior Apple executives to meet with Minister Karta Sasmita when they traveled to Jakarta, but the minister was not there, so they met with the director-general of the Ministry of Industry instead.

The move is part of Indonesia's efforts to pressure foreign companies to boost domestic industries. In the past, it has successfully pressured TikTok's ByteDance to invest $1.5 billion in a joint venture with Indonesian technology company GoTo .

Bloomberg acknowledged that Indonesia is an important market for technology companies such as Apple, with 278 million consumers, more than half of whom are tech-savvy people under the age of 44. But it noted that taking such a hardline approach risks discouraging foreign companies from entering or setting up base in the country.

Indonesia has not only banned the sale of the iPhone 16, but also the Google Pixel for the same reason.

Indonesia bans sales of not only iPhone 16 but also Google Pixel - GIGAZINE