Apple’s A$153 million investment incentive has failed to convince officials to lift the ban on sales of its flagship iPhone 16 within Indonesia.
The company’s proposal to invest that amount hasn’t met “fairness” principles, said a top government official in Jakarta.
The country has indicated that it might rethink its position if Apple increases the amount it is willing to invest.
The current proposed amount falls short of what the US tech firm has invested in other countries, Industry Minister Agus Gumiwang Kartasasmita told reporters this week, according to Bloomberg.
There is merit to that argument. Apple has invested more than 244 trillion rupiah (around A$23.07 billion) toward manufacturing facilities in Vietnam, where its market sales total approximately 1.5 million units.
Apple iPhone 16.
In Indonesia, the company sells around 2.5 million units. Apple ranks outside the top six smartphone brands in Indonesia, but the potential for growth among the young tech-savvy population is high. Indonesia reportedly has more than 350 million active mobile phones, outnumbering its 270 million population, according to government data.
The minister indicated that rival manufacturers such as Samsung and Xiaomi had invested significant amounts in manufacturing devices onshore in Indonesia.
“We want Apple to return to do business here, but we need a fair resolution,” said Kartasasmita.
Indonesia’s government blocked sales of the iPhone 16 on the grounds that Apple hasn’t met a domestic content requirement for smartphones and tablets.
Indonesia also says that Apple still owes $10 million (A$15.38 million) on a previous investment pledge “which is so small,” the minister said.
“We want Apple to send negotiation teams to meet us,” Kartasasmita said.
Apple iPhone 16.
Among the government’s requests are for the company to deliver the remaining amount from its investment pledge last year, and come up with a better offer for 2024-2026.
The official confirmed that the foremost priority was to get the company to open a plant in the country.
Indonesia requires all electronic devices with cellular connectivity to include at least 35 per cent locally produced components.
Until now, Apple chose to meet the local requirement by investing in Apple Academy centres to train and develop local talent.
“We expect this Apple issue can be resolved soon as they also have big interest in doing business here,” said Kartasasmita.
Apart from Apple, Indonesia has also banned sales of Google Pixel phones over a similar concern around lack of investment.
