In response to a ban on the iPhone 16 in Indonesia, Apple has proposed significantly increasing its manufacturing investments in the region.
The Indonesian government reacted firmly after Apple did not meet its promised spending commitments in the country, demonstrating Apple’s strong desire to resolve the situation.
The iPhone 16 Ban
Indonesia has adopted a strategy similar to India’s, insisting that Apple relocate some of its manufacturing to the nation in exchange for being able to sell its products freely.
In India’s case, Apple was prohibited from launching online and physical retail stores until it established significant assembly operations there. Consequently, India has now become Apple’s second-largest manufacturing hub after China.
In Indonesia, Apple proposed a deal involving an investment of around $109 million in local developer academies, alongside an additional $10 million aimed at manufacturing over the next two years. Although this proposal was accepted, the government claimed that Apple fell short on its developer investments, contributing only $95 million.
The government subsequently enforced a ban on iPhone 16 sales within the country. Additionally, Google Pixel phones faced a similar ban for the same reasons.
Apple to Increase Manufacturing Investment from $10M to $100M
Bloomberg reports that Apple has now proposed to escalate its local manufacturing investment from $10 million to $100 million if the government lifts its sales ban on the iPhone.
The plan would entail Apple investing close to $100 million in Southeast Asia’s largest economy over two years, according to unnamed sources. Initially, Apple’s investment of approximately $10 million was intended for a factory producing accessories and components in Bandung, southeast of Jakarta […]
By committing to this investment, Apple aims to gain unrestricted access to Indonesia’s market of 278 million consumers, more than half of whom are tech-savvy individuals under the age of 44.
The specifics of this investment are still uncertain. It might include tasks for Foxconn to set up iPhone and iPad assembly facilities in Indonesia, or arranging for other supply chain partners to manufacture components for Apple products. The government has previously signaled that the latter option would be acceptable.
This is not the first instance of Apple having to promise investments in Indonesia to obtain the right to sell iPhones there; a similar situation occurred back in 2017.
Jakarta photo by Dias ^ on Unsplash
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