In response to the iPhone 16 ban in Indonesia, Apple has proposed a significant increase in its manufacturing investments in the nation, raising the amount from $10 million to $100 million. Update: The Indonesian government anticipates a larger investment – details at the end.
The Indonesian authorities reacted strongly when Apple did not meet its promised spending commitments, prompting the tech giant to seek a resolution swiftly.
The iPhone 16 Ban
Indonesia has implemented a strategy similar to that of India, requiring Apple to shift a portion of its manufacturing operations to the country to facilitate the sale of its products.
In India, Apple was restricted from launching online and physical retail outlets until it established meaningful iPhone assembly facilities. As a result, India has become Apple’s second-largest manufacturing hub, after China.
Initially, Apple offered to compromise by investing approximately $109 million in developer academies over two years and contributing $10 million towards manufacturing. This was accepted, but the government later indicated that Apple only invested $95 million in developer programs.
Consequently, the government enacted a ban on selling iPhone 16 models in Indonesia, which also extended to the sale of Google Pixel phones for similar reasons.
Apple to Increase Manufacturing Investment from $10M to $100M
Bloomberg has reported that Apple has now proposed to increase its local manufacturing investment from $10 million to $100 million, contingent upon the government lifting the iPhone sales prohibition.
The proposal outlines that Apple intends to invest nearly $100 million in Southeast Asia’s largest economy over the coming two years. Previously, the $10 million investment was designated for establishing a factory producing accessories and components in Bandung, situated southeast of Jakarta […]
Through this investment offer, Apple is aiming to gain unrestricted access to Indonesia’s 278 million consumers, a demographic where over half are under 44 years old and technologically savvy.
The specifics of this investment remain uncertain. It may involve collaborating with Foxconn to set up iPhone and iPad assembly sites or coordinating with other supply chain partners to produce components for Apple’s devices.
Update: The government has indicated that they would find the latter method acceptable but, according to the Antara news agency, they expect an amount greater than $100 million.
“From the government’s perspective, of course, we want this investment to be larger,” stated ministry spokesperson Febri Hendri Antoni Arif on Thursday.
This isn’t the first instance where Apple has needed to assure investments to secure the ability to sell its products in Indonesia; a similar situation arose in 2017.
Jakarta photo by Dias ^ on Unsplash
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