Apple Inc. is stepping up its efforts to secure its presence in Indonesia, Southeast Asia’s largest economy, with a $1 billion investment commitment. This comes as the tech giant seeks to resolve a government-imposed ban on the sale of its iPhone 16 devices due to unmet domestic content regulations.
The ban, implemented in October 2024, stemmed from Indonesia’s requirement that manufacturers meet specific local content thresholds for smartphones and tablets. While Apple had previously pledged investments in the region, including $107 million for developer academies, it fell short by $10 million, triggering dissatisfaction from Indonesian authorities.
Investment Minister Rosan Roeslani has been vocal about ensuring fairness in the tech industry. “Whoever benefits from the sales must invest here, create jobs here,” he remarked. Roeslani confirmed that the $1 billion figure is a “first phase” investment and expects Apple’s written commitment within a week. This pledge represents a significant increase from Apple’s earlier offers of $10 million and $100 million, both of which were rejected by Indonesia.
The new commitment from Apple aligns with Indonesia’s broader goal of becoming a global tech hub. Roeslani emphasized the importance of integrating Indonesia into the global value chain, noting that local manufacturing could spur investments across related industries. He cited the example of companies like Samsung and Xiaomi, which have already established local plants in the country.
Apple’s relationship with Indonesia has seen ups and downs over the years. Despite selling nearly 2.9 million iPhones in the country in 2023, the company has not moved manufacturing there, favoring locations like India and Vietnam instead. In April 2024, Apple CEO Tim Cook indicated that the company might consider setting up manufacturing facilities in Indonesia, but no concrete steps have been taken yet.
Indonesia has a reputation for adopting stringent policies to attract foreign investment while safeguarding its domestic industries. For example, the government recently forced ByteDance to separate TikTok’s shopping feature from its social media platform to shield local retailers. Additionally, a ban on exporting raw materials like nickel has been implemented to encourage onshore processing and the development of local battery plants.
The $1 billion investment is expected to not only lift the iPhone 16 ban but also generate significant employment opportunities. Roeslani highlighted the potential ripple effects of such a move, stating that it could draw global suppliers and create a robust ecosystem for tech manufacturing.
The intensified push for foreign investments coincides with newly inaugurated President Prabowo Subianto’s ambitious goal of achieving 8% economic growth within five years. However, the country’s economy expanded at just 4.95% in the last quarter, its slowest in a year, amidst weakening factory activity and consumption.
With over 350 million active mobile phones in Indonesia, the country represents a lucrative market for Apple. The combination of a young, tech-savvy population and the government’s firm stance on local investment could make Indonesia a key player in Apple’s global strategy.
For now, all eyes are on Apple to deliver on its promises and for Indonesia to reap the benefits of this significant economic partnership.
