For the first time, AirTags will be produced in Indonesia, with plans to increase this to 20% of the global output over time, as reported in recent news.
This strategy by Apple aims to comply with a governmental mandate requiring a billion-dollar investment in the local economy to lift a ban on iPhone sales in the region.
Apple’s mandated $1B investment in Indonesia
Governments in populous nations are becoming more strategic about negotiating terms with Apple for market access, insisting on reciprocal investments.
For instance, India previously denied approval for Apple stores until the company established extensive manufacturing operations within the country.
Initially, Indonesia sought a more modest investment of $109 million for a developer academy along with an additional $10 million for manufacturing. However, when Apple fell short of this target, the government escalated its demands, banning the sale of the iPhone 16 and requesting a significantly larger investment.
Although Apple’s initial offer was $100 million, the Indonesian government deemed it insufficient and subsequently requested a billion-dollar investment in manufacturing. Earlier this month, it was reported that Apple had agreed to these terms without disclosing specific details.
Bloomberg has revealed that negotiations have concluded, and Apple is arranging for one of its suppliers to produce AirTags in Indonesia, gradually increasing output to ensure that 20% of AirTags will be made there.
According to sources, one of Apple’s suppliers will establish a facility for manufacturing AirTags on Batam Island. This plant is projected to employ roughly 1,000 workers initially, with Batam selected due to its free-trade zone status, which exempts companies from various taxes and import duties. […]
The facility is set to contribute to 20% of the global AirTag production.
This investment will primarily fulfill the government’s requirement, while other accessories and additional developer academies will account for the rest.
While there hasn’t been an official announcement, reports indicate that the president of Indonesia has accepted Apple’s proposal.
President Prabowo Subianto has reportedly given his approval for the government to accept a $1 billion investment from the American technology giant, according to informed sources.
Photo by Jonas Elia on Unsplash
: . More.
