Apple Inc. has significantly boosted its investment offer to Indonesia, pledging to commit up to $100 million over the next two years in a last-ditch attempt to lift the ban on its iPhone 16 sales in the country. The move comes after Indonesian authorities blocked the phone’s sale, citing Apple’s failure to meet a key domestic content requirement.
The tech giant’s initial investment offer of approximately $10 million fell short of the government’s demand to meet a 40% local content threshold for smartphones. Apple’s revised proposal, which increases the commitment nearly tenfold, signals the company’s intent to cement its position in one of Southeast Asia’s largest and fastest-growing markets.
However, Indonesia’s Ministry of Industry, which enforces stringent local manufacturing rules for foreign companies, has yet to give the green light. While the new investment offer has been acknowledged, officials are reportedly pushing Apple to redirect a significant portion of the funds toward research and development (R&D) initiatives within Indonesia, rather than continuing with existing manufacturing efforts.
Apple’s initial plan focused on expanding its local operations by investing in accessory production facilities in Bandung, a city just southeast of Jakarta. However, the Indonesian government found that this did not sufficiently meet the domestic content levels required for approval.
Under President Prabowo Subianto’s administration, Indonesia has adopted a more assertive approach in leveraging foreign investment to boost local industries. The iPhone 16 ban is part of this broader strategy, which also recently affected other international tech companies, including Google and ByteDance. Google’s Pixel phones were also blocked from sale due to insufficient local investment, and ByteDance, the parent company of TikTok, was forced into a major $1.5 billion joint venture with Indonesian e-commerce giant Tokopedia after facing regulatory hurdles.
Indonesia’s hard-nosed stance reflects the government’s long-term aim of increasing local manufacturing and reducing reliance on foreign imports. However, the policy could have unintended consequences for foreign investors, with critics suggesting it may deter other multinational companies from considering Indonesia as a viable alternative to China for production.
For Apple, which has long relied on third-party suppliers like Foxconn for its manufacturing needs in Asia, the stakes are high. With a population of 278 million people, more than half of whom are under 44 and digitally savvy, Indonesia is an attractive market for Apple, especially given its relatively low penetration compared to other regions in the Asia-Pacific.
Despite Apple’s increased investment offer, the Indonesian Ministry of Industry has yet to finalize a decision. The government’s insistence on local R&D investment suggests a shift toward a more strategic, value-added role for foreign firms in Indonesia’s tech landscape. The outcome of this ongoing negotiation could have ripple effects, influencing how other international firms navigate Indonesia’s increasingly complex regulatory environment.
As of now, both Apple and the Ministry of Industry have kept official comments to a minimum, leaving the fate of the iPhone 16 — and Apple’s future investment in the country — hanging in the balance. How this situation unfolds could have broader implications for foreign business interests in Indonesia, a nation keen on asserting its economic independence while balancing the need for global partnerships.