Apple Inc. (AAPL, Financial) faces a setback in Indonesia as the government bans sales of the iPhone 16 series, citing unmet local investment requirements. The Indonesian government highlights Apple's $1 billion plan to establish an AirTag factory in the country as insufficient under domestic content regulations. According to Minister Agus Gumiwang Kartasasmita, Apple must produce parts of its smartphones locally, and the AirTag alone does not fulfill these criteria.
This development followed a scheduled meeting between the Indonesian Ministry of Industry and Apple, where discussions centered around Apple's investment plans in Indonesia as crucial for launching new iPhone models. Previously, the Indonesian government mandated that Apple renews its investment commitments every three years, with the last $10 million commitment expiring in 2023. The government is now seeking a new commitment for the 2024-2026 period.
As of the latest update, Apple has not been granted the necessary local content certificate to sell its flagship products in Indonesia, prompting further negotiations with government representatives. Failure to comply with local investment rules could result in sanctions, though the Indonesian government prefers alternative solutions and has proposed suggestions to Apple.
Apple suggested building a factory dedicated to AirTags, devices used for tracking items, by early 2026. Currently, Apple executives are negotiating in Jakarta to lift the iPhone 16 sales ban imposed since October. Notably, Apple has not established a manufacturing presence in Indonesia but has been operating an app developer academy in the country since 2018, indicating its long-term interest in the region.
