Indonesia has struck a deal with Apple to lift the ban on iPhone 16 sales, following a months-long standoff. This resolution comes after Apple agreed to invest $1 billion in the country, a move that is expected to significantly boost local manufacturing and technology development.
The ban on iPhone 16 sales was imposed in October 2024 due to Apple’s failure to meet the Indonesian government’s regulations, which require 40% of the phone’s components to be locally sourced. The deal, which was reported by local media, will allow Apple to resume selling the iPhone 16 in the Southeast Asian country under certain conditions.
According to Industry Minister Agus Gumiwang Kartasasmita, Apple will build two new facilities in Indonesia as part of the agreement. One will be located in Bandung, West Java, where Apple will produce accessories, while the second will be in Batam, where the company will invest $150 million to produce AirTags with local suppliers.
“The MoU signed with Apple will allow for the revocation of the iPhone 16 sales ban, which was imposed over non-compliance with local content rules,” said Minister Kartasasmita.
While the official announcement is yet to come, the deal marks a significant step in improving Indonesia’s relationship with one of the world’s most prominent tech companies. A government source confirmed to AFP that the terms to lift the sales ban had been agreed upon, though details remain scarce.
Apple has been under pressure to increase its investment in Indonesia as part of a broader push to diversify its supply chain away from China. In response to the sales ban, Apple increased its investment offer to $1 billion, a proposal that Indonesian President Prabowo Subianto strongly supported.
The $1 billion investment will also include efforts to train local talent in research and development, enabling Indonesians to design software and products. This will help meet the government’s goal of increasing local manufacturing capabilities, which have previously been limited.
Indonesia’s market, with a population of 278 million people, is an attractive opportunity for Apple. Despite currently being outside the top five smartphone brands in the country, the significant young, tech-savvy population represents a growing consumer base for Apple’s products.
However, while the deal marks a positive turn for both Apple and Indonesia, some challenges remain. Indonesia’s previous reversals on decisions have raised concerns about the stability of the agreement, and it remains to be seen how both parties will manage the details of the investment and local content requirements moving forward.
The deal’s timing is also crucial for President Prabowo, who is facing increasing domestic challenges amid recent public protests over policy changes. Securing this agreement with Apple could help improve his standing, both domestically and internationally.
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