Indonesia Blocks iPhone 16 Sales: Apple Misses $107M Local Content Investment Target
Indonesia has blocked the new iPhone 16 from Apple Inc. because the tech giant has not met the local content investment requirements, despite its $95 million investment in the country.
The Indonesian Industry Ministry stopped the sales of the flagship device, because the company has not met the 1.7 trillion rupiah ($107 million) target.
Apple’s Indonesian subsidiary, PT Apple Indonesia, must fulfill a regulation that requires 40% of smartphone components to be sourced locally. This is to boost local manufacturing and keep more tech revenue in the country, a regulation Apple has not yet fulfilled.
Developer Academies Fail to Meet Regulatory Requirements
Instead of building a local manufacturing facility, Apple has taken a different approach to meet localization requirements by setting up developer academies in Indonesia.
These academies develop local talent and app development skills, as part of the company’s goal to build a regional talent pool.
But Indonesian authorities say these academies do not meet the strict local content requirements for smartphone sales approval.
Indonesia Blocks Sale of Apple’s iPhone 16 https://t.co/lzFP12LBPg
— TôuTzuSays (@TouTzuSays) October 28, 2024
This regulatory hurdle may delay Apple’s plans in one of the biggest smartphone markets in Asia until it addresses the government’s demand for local production or additional investment.
“This non-compliance will put Apple’s sales at risk unless a compliant solution is found,” a ministry official said.
9,000 iPhone 16 Units Sneak into Indonesia
Despite the official ban, an estimated 9,000 iPhone 16 units have already entered Indonesia through personal imports, mostly by travelers or through postal services.
These phones are only for personal use and cannot be resold, but it shows Indonesian consumers’ demand for new Apple devices.
🇮🇩📱 Indonesia blocks the sale of the iPhone 16, aiming to pressure Apple into boosting local investment. A bold move in the tech world! 🌍💼
Read more: https://t.co/4nOrA7sWAV#Apple #iPhone16 #Indonesia #Investment #TechNews #SupplyChain #GlobalTrade #Business #Innovation… pic.twitter.com/zi88gJ7T2f
— Epic Health (@Epic_Health_) October 28, 2024
Challenges and Opportunities in Indonesia’s Big Market
With over 270 million population and more than 350 million mobile connections, Indonesia is a big market for Apple. But compliance with local content requirements is a major challenge for Apple and other global tech companies to expand in Southeast Asia.
The setback in Indonesia is in contrast to Apple’s success in China where it has overcome regulatory hurdles.
Apple may revisit its local investment or partner with Indonesian manufacturers. Compliance will surely cement Apple’s presence in Southeast Asia where the middle class is growing and premium smartphones are in demand.
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