Apple Bends to Demand in Indonesia, Offers Incentive to Indonesia in Bid to Lift iPhone Ban
Apple is offering around $10 million to Indonesia in hopes of lifting the ban on its latest iPhone. The tech giant is proposing to set up a production facility in Bandung, Indonesia, to follow the country’s local manufacturing rules.
Apple’s Plan to Build a Factory in Indonesia
To meet Indonesia’s requirements, Apple plans to build a production factory in Bandung, southeast of Jakarta. The factory would make parts and accessories for Apple products, in collaboration with local suppliers. This move is aimed at following the local rules that require foreign companies to produce a certain amount of their products locally if they want to sell them in the country.
The iPhone Ban and Local Content Rules
Apple was recently stopped from selling its iPhone 16 in Indonesia because it didn’t meet the country’s local content requirement. Indonesia’s Ministry of Industry said Apple failed to have enough locally made components in its devices. The company’s local subsidiary, PT Apple Indonesia, was told that it had not invested the agreed amount—1.7 trillion rupees ($95 million)—as required by local law.
Apple’s Investment Could Open Access to a Huge Market
The $10 million Apple is offering may be a small amount compared to the company’s global earnings, but it could help Apple unlock access to Indonesia’s large economy. With a population of 270 million people and over 350 million active smartphones in the country, Indonesia represents an important market for Apple.
Indonesia’s Push for Local Manufacturing
Indonesia, President Prabowo Subianto, has focused on policies to encourage foreign companies to set up local factories and protect its own industries. This approach has made it harder for international companies like Apple and Google to operate in the country without meeting strict local production and investment rules. For example, last year, Google’s Pixel phone was also banned in Indonesia for not meeting the country’s local investment rules.
How Indonesia’s Policies Affect Foreign Companies
While Indonesia’s policies aim to boost local manufacturing and protect domestic businesses, they can also discourage foreign companies from expanding into the country. While some companies may see the policies as an opportunity to invest and grow in Indonesia, others might find it difficult to meet the requirements and may look to other markets in the region.
Conclusion
Apple’s offer to invest $10 million in Indonesia shows how important the country’s market is to the company. By building a local production facility, Apple hopes to meet Indonesia’s rules and sell its iPhone models in the country again. However, Indonesia’s strict manufacturing policies could be a challenge for other international companies looking to do business there.
