Apple plans more investment in Indonesia to lift iPhone ban
What's the story
Apple is said to be planning to invest nearly $10 million in its Indonesian manufacturing operations.
The tech giant hopes this would lift the ban on the latest iPhone 16 model.
The ban was imposed for not complying with the country's 40% domestic content requirement for smartphones and tablets.
The investment will go into a facility in Bandung, southeast of Jakarta, which will manufacture components and accessories for Apple products.
Proposal scrutiny
Investment proposal under review by Indonesian authorities
Apple has filed its investment proposal with Indonesia's Ministry of Industry, which recently blocked the sale of iPhone 16.
The ministry is reviewing Apple's plan and negotiations are underway. Neither party has publicly commented on this matter yet.
This ban comes as part of a larger effort by President Prabowo Subianto's government to push global companies to increase local production, a strategy reminiscent of former President Joko Widodo's policies.
Tech impact
Indonesia's local production push impacts global tech giants
Indonesia's drive for greater local production has impacted other tech giants as well.
Google Pixel phones were banned from sales for insufficient local investment, while ByteDance was forced to invest $1.5 billion in a joint venture with Tokopedia after being restricted from its services.
Apple's planned investment is viewed as a strategic move to keep access to Indonesia's 278 million-strong consumer base, many of whom are young and tech-savvy.
Production approach
Apple's manufacturing strategy in Indonesia
Currently, Apple operates without standalone factories in Indonesia, partnering with regional suppliers for production needs. However, this could be challenged by Indonesia's stringent policies.
While the latest deal with Apple would be a win for local industry, such aggressive tactics could scare off other multinationals, especially those looking to diversify production away from China.
This could go against President Prabowo's goal of attracting foreign investment to boost economic growth.
Past investments
Previous investments and Indonesia's trade policies
Apple had previously invested some 1.5 trillion rupiah (around $95 million) in Indonesia's developer academies, short of its pledged 1.7 trillion rupiah.
Reportedly, Indonesian officials have asked e-commerce platforms such as Tokopedia and TikTok to remove iPhone 16 listings, threatening legal actions if they fail to comply.
This comes as part of Indonesia's unpredictable trade policies, which earlier this year introduced import restrictions on several items including electronics and chemicals, to push foreign companies toward local production.