Jakarta (Reuters) – Apple’s plans to sell its iPhone 16 in Indonesia have hit a roadblock despite efforts to establish a local production facility in the country. According to the industry minister, the tech giant has failed to comply with domestic content regulations, preventing the sale of the device within Indonesian borders.
Last year, Indonesia implemented a ban on the sale of the iPhone 16 after Apple fell short of meeting the stipulated requirement that smartphones marketed in the country must contain a minimum of 35% locally-manufactured components. Minister Agus Gumiwang Kartasasmita revealed that although Apple had agreed to construct a facility on Batam island, focused on producing its Airtag tracking device, this initiative would not satisfy the criteria for considering the product as locally-made.
“The ministry cannot grant local content certification to facilitate the sale of the iPhone 16 by Apple, as the proposed facility does not establish direct relevance to the manufacturing of iPhone components,” stated Minister Kartasasmita, emphasizing that only phone components would be considered for compliance.
In a related development, Indonesia’s investment minister disclosed on Tuesday that the planned factory, valued at $1 billion, is slated to commence operations in the upcoming year. Minister Agus, who engaged in discussions with Apple’s Vice President of Global Government Affairs Nick Ammann over a two-day period, shared that Apple had presented an “innovative investment” proposition, to which Indonesia responded with its own terms.
It is worth noting that Apple does not presently operate any manufacturing facilities in Indonesia, a nation with a substantial population of approximately 280 million inhabitants. However, the company has established application developer academies in the country since 2018.
The situation underscores the complexities that global companies face when navigating local regulations and compliance requirements as they seek to expand their market presence in various regions. The case of Apple and the iPhone 16 serves as a pertinent example of the challenges posed by stringent domestic content rules in Indonesia’s tech sector.
(Reporting by Bernadette Christina; Writing by Stanley Widianto; Editing by Martin Petty)
