William Gallagher
Indonesia's government has considered Apple's increased offer of $100 million of investment in the country, but reportedly wants more before it will lift its ban on the iPhone 16 range.
"Industry Minister Agus Gumiwang Kartasasmita held an internal meeting to discuss the proposal," government spokesperson, Febri Hendri Antoni Arif, told local news agency Antara News. "From the government's perspective, of course, we want this investment to be larger."
The issue concerns Indonesia's law that smartphones must contain at least 40% of locally manufactured components. This Domestic Content Level law can be assuaged by various methods including innovation development schemes, which Apple has previously preferred.
Apple's previous investment, though, amounted to less than the $109.6 million it had committed. After warning Apple on October 11, 2024 that it could face a ban, Indonesia then blocked all iPhone 16 sales from October 28.
On November 5, it was reported that Apple offered a derisory $10 million more in investment. Then on November 19, it upped that offer tenfold.
Reportedly, that proposed $100 million in further investment was to take place over two years. It would chiefly be used for a research and development center, and developer academies in Bali and Jakarta.
There was at least one manufacturing element, however, as Apple is said to have planned making AirPods Max mesh components in Bandung from July 2025.
It appears that Indonesia wants more of a manufacturing commitment from Apple, however.
"While we are not yet able to produce semiconductors, if Apple requires them, they could source components from domestic suppliers, continued spokesperson Febri Hendri Antoni Arif. "Of course, we would be eager to support this."
"This would create a multiplier effect," he said, "particularly in terms of labor absorption in Indonesia."
The ban and the subsequent negotiations follow Tim Cook's visit to the country in April 2024. Cook met with Indonesia's then President Joko Widodo, and promised Apple would consider the country as a manufacturing partner.
"We talked about the president's desire to see manufacturing in the country, and it's something that we will look at," Cook said at the time. "The investment ability in Indonesia is endless."
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10 Comments
Sure looks like foreign direct investment via extortion to me. Can someone remind the Indonesian authorities that Singapore and Malaysia are short plane rides away? Good luck with that iPhone ban..
At this point they are trying to see how far Apple will go to be unbanned
There are other Asian countries that have a good talented Engineers and workforces, Apple don’t overlook Philippines, Thailand, Malaysia.
The Indonesian word for extortion is "pemerasan".
Apple’s Indonesia market share is only 4% look at some of the other surrounding countries Apples market for iPhones is over 30%. Indonesia is over playing their hand.
https://worldpopulationreview.com/country-rankings/iphone-market-share-by-country Indonesia at 4%, but Vietnam, Thailand, Brunei, Malaysia are all over 30% and Cambodia is king at 40%…….. surprise, surprise.
Note the population of all those countries put together is only 50 million less than Indonesia and even if Indonesia had the same percentage of users it still wouldn’t be enough to make a difference, what’s the difference between 84 and 65 million users functionally, Indonesia has no leverage.