iPhone 16 & iPhone 16 Plus Remain Prohibited in Indonesia
It has been four months since the Indonesian government imposed a ban on the sale of the iPhone 16, leading Apple to explore local manufacturing options with its suppliers.
The prohibition took effect in October 2024, shortly after the iPhone 16 series was officially launched. This action stemmed from Apple’s failure to meet investment commitments made to Indonesia that had previously allowed it to bypass strict import regulations.
In response to escalating demands from Jakarta, Apple made several proposals, including direct investments and the expansion of its development centers. However, these offers have repeatedly been turned down by Indonesian authorities. Recent reports from Nikkei Asia indicate that Apple is now actively discussing potential manufacturing operations within Indonesia.
It remains uncertain if fulfilling its original pledge of around $110 million would have circumvented this sales ban. Notably, Apple’s investment fell short at $95 million and may have coincided with the conclusion of a previous agreement period.
Regardless of past actions, Indonesia enforced what it refers to as a local content quota mandate. Though estimates vary slightly, companies are required to acquire between 35% and 40% of components locally for their electronic devices.
Currently, Apple does not have any manufacturing partners based in Indonesia. Nonetheless, in April 2024 CEO Tim Cook indicated interest in possibly establishing local production facilities. It wasn’t until October that authorities enforced the ban on sales for the newly launched iPhone series.
Since then, Apple has escalated its offers significantly—notably starting with a modest $10 million proposal which was ultimately insufficient to mend previous discrepancies. With subsequent attempts including an offer totaling $100 million also declined by officials, Apple reportedly presented a bold proposition amounting to $1 billion—though this investment was still deemed inadequate by Indonesian leadership.
Part of this substantial offer involved relocating some production capabilities to Batam Island for items like AirTags; however, Industry Minister Agus Gumiwang Kartasasmita clarified that such operations do not directly relate to components necessary for manufacturing the iPhone models under restriction.
Establishing manufacturing infrastructure and supply chain networks compliant with local content requirements will require considerable financial investments and time commitments.
Apple is likely insisting that any future agreement involving such factories be accompanied by an immediate lifting of restrictions on selling their new flagship smartphones.
Prior to this embargo being placed on them, projections indicated that Apple could potentially sell approximately 2.9 million phones within Indonesia throughout all of 2024—translating into just about two percent penetration among potential purchasers across the market there.
