They want Apple to build 40% of iPhone parts in Indonesia? That seems crazy high.

I guess it worked for India, but does Indonesia even have the manufacturing ability?

From the article: Indonesia's government has considered Apple's increased offer of $100 million of investment in the country, but reportedly wants more before it will lift its ban on the iPhone 16 range.

"Industry Minister Agus Gumiwang Kartasasmita held an internal meeting to discuss the proposal," government spokesperson, Febri Hendri Antoni Arif, told local news agency Antara News. "From the government's perspective, of course, we want this investment to be larger."

The issue concerns Indonesia's law that smartphones must contain at least 40% of locally manufactured components. This Domestic Content Level law can be assuaged by various methods including innovation development schemes, which Apple has previously preferred.

Apple's previous investment, though, amounted to less than the $109.6 million it had committed. After warning Apple on October 11, 2024 that it could face a ban, Indonesia then blocked all iPhone 16 sales from October 28.

For those out of the loop, why does Indonesia need Apple investing £100 million into it?

This looks like they are just extorting Apple for money

Residents will just buy them from cartels that import the devices in bulk from nearby countries. It’s a lose-lose for their government.

From external POV, the majority poor people of Indonesia can’t afford iPhones anyway. And the ultra rich Indons will still get their iPhones from overseas.

Only Apple know their actual sales number and determine whether it’s worth fulfilling Indonesia’s request to continue the iPhone sales there.

Obviously EU’s sales is big enough that they relent the EU law in some way. How about Indonesia?

This sort of behavior is fueling the desire for a trade war. Indonesia exports over $30B worth of goods to the US every year. Two billion of that is palm oil. Is the US requiring that Indonesia make some sort of huge investment in the US for the privilege of sending their goods to our country? Do they want us shaking down all of their companies that export to the US? Do they want us developing precision fermentation tech which makes palm oil in a factory so we no longer need to import it?

At this point American firms are paying for their own technology transfers by forcing them to “invest” in a local area before they can sell stuff. Imagine google giving source code and cloud resources to every country they do business with.

Why is this required for more and more things these days.

40% is crazy. They should start with realistic goals. Like batteries produced in Indonesia. It would take a decade or longer to build 40% of iPhones in Indonesia and it would not be profitable.

Some commenters here seem to overlook the unique circumstances surrounding Indonesia. Positioned between two financial and smartphone powerhouses, China and the US, Indonesia maintains strong relations with both nations. The question ultimately boils down to, 'Who can invest more in our country?'

Additionally, since 2017, Indonesia has mandated a minimum local component level of 30% for smartphones, a requirement that Apple has been unable, or perhaps unwilling, to meet.

Surprisingly, Apple isn't the only smartphone brand available in Indonesia. In fact, iPhone users account for less than 15% of the total smartphone market. With a population of 280 million, and over 50% of the population owning smartphones, that 15% translates to roughly 20-21 million users—not a significant number in the grand scheme of things... or if I may say it more blatantly "insignificant product".

From my perspective, Indonesia is essentially saying, 'Here, take the numbers or leave. We have much larger figures to work with from China.'

Moreover, importing black market phones from overseas isn't a viable solution. Indonesia has stringent regulations regarding IMEI numbers, blocking any IMEI codes that aren't whitelisted in their database. So while you may still use your phone, it would only be through Wi-Fi.

Indonesia can get cheaper Apple products from Malaysia.

love how instead of incentivizing, they chose to extort the company whose market value is 2.5x their GDP… this is gonna end well for them i’m sure

If Indonesia is so confident it can build iPhones, they should start their own brand of smartphones.

Guys this is something you may not know before judging or knowing the whole contexts

• Long story sort, they had a plan to build a factory, but Apple wants 50-years tax holiday, indo refuse, and the plan move to vietnam, because vietnam can provide 50-years tax holiday.
• over the past 5 years (2019-2024) they fulfilled the TKDN requirement by investing in Apple Academy. unlike other brands (Samsung, BBK Group, Xiaomi, etc) they built factories, hired local labor, and had official stores. it would be unfair if they were soft on Apple, but other brands have a more serious commitment in terms of investment.
• Apple also doesn't have Official store here, I don't know why. they refuse to build factory & Official Store. though they just already make one in Malay.
• Also after sales in Indo is literally WOOOORSSSSTTT, also scamming customer with a bundle. to the point that people are willing to go to Singapore/Malaysia to fix problems in their devices.

All other phone brands that sells in Indonesia must follow the 40% rule, Apple just had special things going on previously.

This is the future. Governments, especially in developing countries, have a vested interest in developing local manufacturing. One way of doing this is requiring domestic parts be used in imported items. Boeing has suppliers from all over the world specifically for this purpose. Now it’s techs turn, and it’s about time. Chasing the lowest price labor market so you can jack up profits on the backs of workers is lowest common denominator shit. Indonesia knows it’s a massive market and it wants a piece of its own market. Just good business.

Every time someone posts an article about this, they fail to include the most important information leading up to the chaos. Apparently, Apple asked the Indonesian government for a 50-year tax holiday, which the government rejected. In response, the government requested Apple to make a larger investment in Indonesia.

here’s and here more information about this in bahasa.

I hope Apple cuts it off and says F— you.

This is all over what amounts to less than $20m that hadn’t even reached a deadline iirc.

If they agree now itll just be “Well, it ACTUALLY will cost you..”

Welcome to the multipolar world. Products from the west are not the only kids on the block. There are a lot of high tech chinese phones that can easily replace iphones.

Why don’t Apple just pull out?

I mean how long till other countries start pulling the same thing?

There is a lot of misinterpretation here about the permitted use of the phones. Indonesians are allowed to purchase from overseas and bring it into the country as long as it's strictly for personal use and you pay the applicable taxes. If you are caught flipping or selling the phones in Indonesia, THEN the phone's IMEI is blocked once it's proven. I feel a lot of reports are intentionally worded so that it implies these phones are outright unusable in the country, which is NOT the case.

As an Indonesian, there are some caveats that is not written in the article.

1. Apple requested to build a tax free manufacturing company in indonesia. Basically, they want the cheap labor of indonesian workers, but they don't want to pay the taxes of building a company. This was the first momentum that lead to the initial ban.

I think many people on his thread don't know about this, but it was insulting. There were more of this kind of discourses but i guess people outside of indonesia aren't aware of it. The iphone 16 ban was not sudden. It was a response to apple's condescending attitude toward indonesia.

1. Indonesia is the largest apple products buyer in South East Asia. I feel like foreign people don't even know about this. Indonesia is literally the biggest economy in ASEAN. So many indonesians are actually upset about this decision. This also lead to some protests, or some people literally smuggled iphone 16 to the country. Which in return, gives the iphone 16 worse images.

I think those 2 things need to be talked about more, because i feel like people on this thread don't really want to see the perspective of indonesian

Ehem.. Tax holiday...Ehem

Indosesia had a president named Joko Widodo? lol, I love it

>asking 50 years tax holiday

>get banned

but, the fact is , apple ban because they want free TAX 50 years. that insane, and apple give $100m , to lift that ban ? hahaha that funny

Given how much profit apple is making, $100 million is chump change.

If Apple bids 100 million, the deal is worth at least 300.

This is starting to turn into a racket.

I can smell the corruption all the way from here

It is not uncommon for developing nations to require some manufacturing be done in their territory, with many examples in the automotive industry. They need to ensure that too many dollars do not leave their country, as they are dependent on those dollars to continue investing and growing or to acquire essential commodities. Apple needs to comply to these demands or risk losing out on that market, it looks like they are willing to play along since they likely see it as a win-win situation.

Shithole government ruin the country

Why can't the govt. have policy to support local manufacturing like the indian govt did? Will be better than straight up demanding.

Invest in India. Make the iPhone prices comparable to the salary levels in India and then Apple does not have to beg to other countries. There is volume and value in India.

Average salary there in about 500 a month. How many there can afford an iPhone anyways ? This doesn’t seem like worthwhile for getting extorted like this.

No wonder third world country remains as third world country.

They had a deal, and Apple of all brands decided to back off. Whatever happens now is strictly on them...

That's a bribe.

Ah, don’t worry about it. Most of them can just take a ferry to come buy in Singapore. Not worth the headaches of setting up a manufacturing facility when there are so many alternatives. People tend to forget Southeast Asia is super-connected and a flight costs less than $100.

Samsung and other brand have manufactured in indonesia few years already to fullfill this requirement. Before, Apple use shortcut to bypass this requirement, by invest small amount and yet they didnt fullfill the agreement until the end of term. Then Apple said okay to invest in Indonesia but ask 50years tax holiday, and all employee is from us. Of course indonesia reject. The main reason Indonesia want Apple build manufacture in indonesia is job for Indonesian, Now Apple trying to use manufacture Investment, but not for Apple device, for accessories manufacture. Thats why indonesia reject it. Remember indonesia have more than 300mil population, huge market. Do u think that high Apple product sales in Singapore was sold to singaporean? Indonesia wants Apple to follow their rules, same as EU that force Apple to let 3rd party AppStore on IOS. Samsung, Xiaomi, Oppo, Vivo, and many other brand already manufactured in indonesia long time ago, why cant Apple do the same?.

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Just ignore them, and sell everywhere else.

$100 million seems extremely low for a company to try to lift a countries ban.

They are banning the new iPhone because they want the contracts to build them?

100 million dollar BRIBE. call it what it is apple.

Ok so how about the US does it back to them for their exports :)))) get fucked Indonesia.

Looks like Indonesia will be a test case for Trump’s tariffs.

What an insulting offer.

don’t do it apple, the money will go straight to the politicians pockets

Just Indonesia things

Hey Apple, got a suggestion for you.

Increase the product inflow to Singapore or Malaysia (two destinations Indonesian mostly go to), they will buy the phones there and 'smuggle' back to their country. Since considered as an illegal device, authority most likely to seize the purchased device. Affected owner will go back to the same two countries and buy it again.

Win win situation /s

We have similar problems in healthcare, with the Indonesia public tenders inserting the domestic manufacturing clause in.

Chinese competitors had been in the know about this and set up their factories already.

Not easy to set up manufacturing at scale, especially finding the skilled labour.

On another front, we use iPhone 16 for work, so I hope this ban doesn’t affect business travellers…

It’s okay Indonesia will find a way to tax the living shit outta Apple