iPhone 16 and Apple Watch 10 get banned in Indonesia following investment dispute

What just happened? The Indonesian government has banned the sale of the latest iPhones and Apple Watches after Apple failed to meet its investment commitments in the country. The banned products include the new iPhone 16 models and the Watch Series 10, which were unveiled at Apple’s “Glowtime” event on September 9.

According to Bloomberg, the ban extends to all units already sold, making it illegal to operate any iPhone 16 model in the country. Industry Minister Agus Gumiwang Kartasasmita warned citizens against purchasing the banned devices abroad and urged them to report anyone using a prohibited iPhone or Apple Watch.

The ban follows allegations from the Indonesian government that Apple has not fully met its investment commitments in the country. To date, Apple has reportedly invested 1.48 trillion rupiah ($94 million) in Indonesia, falling short of its promised 1.71 trillion rupiah ($108 million) by 230 billion rupiah ($14 million).

The minister also cited Apple’s failure to meet component localization requirements as an additional reason for the ban. Apple reportedly did not secure an extension for the TKDN certification on the iPhone 16, as it lacked the 40 percent locally manufactured components required for legal sale in Indonesia.

This ban is unlikely to impact Apple’s bottom line significantly, as Indonesia is not one of its largest markets. Although Apple does not rank among the top five smartphone vendors in the country, it holds a strong lead over Samsung in the premium handset segment. According to IDC, Oppo is the leading smartphone vendor in Indonesia, followed by Samsung, Transsion, Vivo, and Xiaomi.

Earlier this year, Tim Cook visited Jakarta and met with President Joko Widodo to discuss the possibility of establishing a manufacturing facility in Indonesia. This aligns with Apple’s broader strategy to diversify its supply chains away from China, where most of its smartphones and tablets are currently assembled.

Apple has already moved some production to Vietnam and India amid escalating tensions between Beijing and Washington and is collaborating with its manufacturing partners to expand production capabilities in other low-cost Asian countries.