Indonesia says Apple’s $1 billion investment isn’t enough

Jakarta – Image credit: Tom Fisk/Pexels

The Indonesian government says it will not lift its ban on sales of the iPhone 16 despite Apple committing to $1 billion in manufacturing within the country.

Indonesia has long operated what’s called a local content mandate, meaning that devices sold there had to have 35%-40% of their components sourced within the country. For years, though, companies including Apple could seemingly get around that high bar by instead investing in development and jobs in the country, but not any more.

Following reports of a meeting between government officials and Apple executives, Reuters says that Minister Agus Gumiwang Kartasasmita has now confirmed reports that Apple has made a deal to invest $1 billion in a new facility.

The factory will be built on Batam, part of the Riau Islands near Singapore. Reportedly, it will open in 2026 and be used to manufacture AirTags — and Indonesia says that doesn’t count.

“There is no basis for the ministry to issue a local content certification as a way for Apple to have the permission to sell iPhone 16,” said Minister Agus Gumiwang Kartasasmita, “because [the factory] has no direct relations [to iPhone components].”

Agus told reporters that he had held two days of meetings with Nick Ammann, Apple’s vice president of global government affairs, who offered “innovative investment” proposals.

Prior to 2024’s ban, Apple had been allowed a local content mandate chiefly because of its investment in creating local developer academies. Apple’s commitment at the time was for around $110 million, and the company fell short of that by about $10 million.

It’s not clear if Apple would have been able to continue selling the iPhone 16 if it had not failed to meet its commitments. But it appears that Indonesia has decided to make its local content mandate inviolate.

Sources vary on whether that mandate requires 35% or 40% of components to be locally sourced, but either way it’s difficult for any manufacturer to meet that target, although Huawei plans to shortly. Apple currently has no manufacturing facilities in Indonesia, although Tim Cook did promise to consider changing that.

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