A dispute between Apple and the Indonesian government has impacted the sale of the company's products in the country. According to Indonesian legislation, smartphones sold in the country must contain at least 40% local components. Apple failed to meet this requirement, leading to a ban on the sale of iPhone 16 in Indonesia in October 2024.
To resolve the issue, Apple initially proposed an investment of $10 million, followed by an increase to $100 million. However, the Indonesian government deemed these amounts insufficient and demanded a larger investment. As a result, Apple proposed a $1 billion investment.
As part of this investment, Apple planned to build a factory on Batam Island for the production of AirTag tracking devices. However, the Indonesian government stated that the factory did not meet local component requirements and was not enough to authorize the sale of the iPhone 16, as AirTag is considered an accessory, not a smartphone component.
Recent reports indicate that a deal has been reached between Apple and the Indonesian government. According to the agreement, Apple will invest approximately $320 million, which will lead to the lifting of the iPhone 16 sales ban. This investment will involve the construction of a factory for the production of AirTag devices and another factory for producing mesh fabric for AirPods Max headphones. Additionally, Apple will allocate $10 million for education and training, expand its developer academies, and invest $160 million in innovation, including research and development centers.
With this agreement, Apple has found solutions that comply with the local component requirements and taken significant steps to lift the iPhone 16 sales ban in Indonesia and re-enter the market.
