Apple is set to resume iPhone 16 sales in Indonesia after reaching an agreement with the government to comply with local manufacturing regulations.
Industry Ministry confirmed the resolution during a press conference on Wednesday, marking the end of a five-month sales halt imposed due to non-compliance with domestic content requirements.
Compliance with Local Regulations
Indonesia mandates that smartphones and tablets sold in the country contain at least 40% locally sourced components.
Apple had not met this threshold, leading to the temporary suspension of iPhone 16 sales. To address the issue, Apple has committed to investing $1 billion in its first manufacturing facility in Indonesia, which will produce components for iPhones and other Apple devices.
This agreement follows Indonesia’s earlier rejection of Apple’s $100 million investment proposal, which officials deemed insufficient to meet regulatory standards.
Industry Minister Agus Gumiwang Kartasasmita stated that Apple is in the process of obtaining a local content certificate, a necessary requirement to market its devices in Indonesia. The company has not yet commented on the latest development.
Apple’s Expansion in Indonesia
Apple’s investment aligns with its broader strategy to diversify its supply chain and expand production beyond China.
Currently, iPhone 16 models are manufactured in Brazil, India, and China, while production of other Apple devices, such as AirPods, has expanded to Vietnam.
In addition to the new manufacturing facility, Apple plans to establish a research and development center near Jakarta and invest in component production plants, including those for AirPods.
These new facilities, valued at over $300 million, will further Apple’s presence in Indonesia beyond smartphone sales.
Apple has operated developer academies in Indonesia since 2018, providing training in app development.
Until now, it has lacked a local manufacturing presence. The new investment marks its first major move toward building a production base in the country.
Negotiations and Policy Enforcement
Negotiations between Apple and the government involved extensive discussions over the required investment level.
Minister Kartasasmita described the process as “tricky,” highlighting the government’s efforts to secure an agreement that aligns with national economic interests.
Indonesia initially rejected Apple’s offer of a $10 million investment for accessory and component production, followed by a revised $100 million proposal.
The government ultimately approved the agreement after Apple committed to a $1 billion investment in a new facility in Batam.
The country has previously enforced local component regulations on other smartphone makers. Google’s Pixel devices were also prohibited from being sold in the country due to similar non-compliance issues.
The policy has contributed to a smartphone market where brands such as Oppo, Xiaomi, Transsion, Samsung, and Vivo dominate, as seen in Q3 2024 market data.
iPhone 16 Sales Timeline Remains Unclear
Despite reaching an agreement, Apple has not yet obtained the local content certificate required for sales to resume. The government has not provided a specific timeline for the certification process, leaving uncertainty about when the iPhone 16 will be officially available in Indonesia.
During the sales ban, an estimated 9,000 iPhone 16 units entered Indonesia through unofficial channels, as individuals were allowed to bring in personal-use devices without commercial resale restrictions.
Apple’s Position in Indonesia’s Market
The sales disruption impacted Apple’s standing in Indonesia’s smartphone market. According to research firm Canalys, Apple did not rank among the top five smartphone brands in Q3 2024, with Android-based competitors continuing to hold the largest market share.
Apple’s increased investment in Indonesia could enhance its market presence, but it remains to be seen whether local production efforts will lead to a significant shift in consumer preferences.
With this agreement in place, Apple is set to re-enter Indonesia’s competitive smartphone market while the government secures a major investment in local manufacturing.
The situation reflects the broader trend of global technology companies adjusting to regional regulations as they expand their international operations.
