Indonesia welcomes Huawei but wants still more from Apple

Apple is in negotiations with an increasingly demanding Indonesia to get its iPhone 16 ban lifted, while Huawei plans to shortly launch its smartphone in the country.

The ban on sales of the iPhone 16 in Indonesia originally followed Apple's failure to meet its commitments to the country. Firms have to either source an unfeasibly large 40% of components from the country, or invest in development within the region, which is what Apple had committed to do.

Based on previous reports, it appears that Apple's shortfall was around $10 million, and the company did then offer Indonesia that amount to basically make good. It was a token and the Indonesian government rejected it, making Apple up its offer to $100 million worth of investment.

The government rejected that too, and seemingly chiefly on the grounds that Apple was again proposing to create more developer academies and a research and development center. It's possible that Apple was also planning to make AirPods Max in the country, but the government there wanted much more manufacturing.

Then in December 2024, with the iPhone 16 ban still in place, Investment Minister Rosan Roeslani said Apple would announce a $1 billion proposal within a week.

Later that month, sources in the country said that Indonesia President Prabowo Subianto had approved Apple's proposal to build factories in the region. It wasn't confirmed by either side, but it was believed this was the $1 billion proposal that the minister alluded to.

Apple has not commented on any part of the negotiations, but now according to Reuters, representatives from the company met with officials on January 7, 2025, to discuss the issue. Indonesia's Industry Minister Agus Gumiwang Kartasasmita said that he had met with various Apple executives, including Nick Ammann, its vice president of global government affairs.

"We do not set any time frame for a deal, but we have set a target for the substance of a deal," said Agus.

All of this follows Tim Cook's promise in April 2024 that Apple would consider manufacturing in Indonesia.

Perhaps that was taken as an empty promise. Certainly Apple did fail to meet the country's requirements for what's called the local content mandate.

Whatever the reasoning, Indonesia steadily increased its demands on Apple from the $10 million, to $100 million, to $1 billion. And it's seemingly not over yet.

For while Industry Minister Agus Gumiwang Kartasasmita refused to confirm that Apple was offering $1 billion, he did comment on the rumor.

"If it is $1 billion, it is not sufficient," he said.

Enter Huawei

According to the latest figures from IDC in December 2024, Apple sold 2.1 million iPhones in Indonesia in 2023, and was expecting to sell 2.9 million in 2024. While sales were growing until the iPhone 16 ban was imposed, iPhone still represented no more than around 2% of the Indonesian smartphone market.

With a population of 278 million people, the giant majority using Android, Huawei has now revealed that it will be releasing smartphones in Indonesia from March 2025. It's specifically smartphones from Huawei subsidiary Honor, and according to CNBC will include a folding model.

That will come in an initial batch of 10 medium to high-end smartphones that Huawei will release in March. By the end of 2025, it plans to have around 30 devices, including both phones and tablets.

Huawei appears to be meeting Indonesia's requirements by partnering with a local manufacturing firm. It also has an office in the country, and is planning to open at least 10 stores there.

And there is no sign of a $1 billion investment in Indonesia from Huawei.

5 Comments

NYC362 5 Years · 105 comments

About 23 hours ago

There comes a point where Apple is going to have to bite the bullet and flip the Indonesian government the bird and just pull completely out of the country until saner heads prevail.

It’s one thing to require some investment, but constantly moving the goal posts is outright bribery at this point.

4 Likes · 0 Dislikes

rob53 14 Years · 3318 comments

About 23 hours ago

NYC362 said:

There comes a point where Apple is going to have to bite the bullet and flip the Indonesian government the bird and just pull completely out of the country until saner heads prevail.
It’s one thing to require some investment, but constantly moving the goal posts is outright bribery at this point.

I agree. Apple doesn't have to sell products to every country. I'm sure the USA supports Indonesia with plenty of money. There's no reason Apple needs to invest in this country. Goes the same with the other countries demanding major investments to get Apple products.

2 Likes · 0 Dislikes

avon b7 21 Years · 8060 comments

About 22 hours ago

Honor was divested from Huawei a few years ago as a result of sanctions.

It is no longer an official subsidiary of Huawei and Huawei itself pulled out of consumer sales in Indonesia in 2020 as a result of government regulations (the same regulations Apple is dealing with).

I don't know if they have plans to re-enter the market.

2 Likes · 1 Dislike

muthuk_vanalingam 9 Years · 1373 comments

About 19 hours ago

avon b7 said:

Honor was divested from Huawei a few years ago as a result of sanctions.

It is no longer an official subsidiary of Huawei and Huawei itself pulled out of consumer sales in Indonesia in 2020 as a result of government regulations (the same regulations Apple is dealing with).

I don't know if they have plans to re-enter the market.

Yes, I am aware of the fact that Honor was divested from Huawei few years ago. Even the linked article mentions the same. Surprised to see that AI author is not aware of this fact and uses Huawei's name in place of Honor which is incorrect. I don't think Huawei has plans to re-enter other international markets anytime soon. It is Honor which will expand their presence in other markets.

0 Likes · 1 Dislike

mpantone 19 Years · 2260 comments

About 14 hours ago

NYC362 said:

There comes a point where Apple is going to have to bite the bullet and flip the Indonesian government the bird and just pull completely out of the country until saner heads prevail.
It’s one thing to require some investment, but constantly moving the goal posts is outright bribery at this point.

There are some problems with abandoning this market.

It is the fourth largest country by population, about 283 million inhabitants (after India, China, and the USA itself).

Indonesia is an emerging market with a growing population (birthrate greater than replacement rate). Also as a country in Southeast Asia, they likely have aspirations of becoming a destination where manufacturers would set up operations, creating jobs.

As Indonesia's population represents a 3.5% world share, this market impacts Apple's revenue materially. It's not like Apple considering abandoning Tuvalu (population 12,000).

Anyhow, if Apple really wanted to abandon Indonesia, they wouldn't have engaged in discussion. Both sides know the stakes are considerable. It's really going to be some sort of compromise, a meeting point somewhere between what each side wants.

Obviously Apple is well aware that if it concedes and signs up for a big investment amount, other nations will queue up with outstretched hands begging for dollars. It will also open the door for the Indonesian government to make similar demands from other companies.

Apple knows it cannot just pack up all of its toys and leave the sandbox. Not the fourth populous nation in the world. That would anger investors. As a publicly traded company, Apple's primary responsibility is to increase shareholder value. That is a tougher task if their abandon the 4th largest market (by population). That simply isn't a realistic option for any Fortune 100 company.