Apple’s latest iPhone 16 series recently got into a regulatory problem in Indonesia. The firm was temporarily banned from selling the new devices. According to the statement of Indonesia’s Ministry of Industry, the iPhone 16 models failed to meet the 40% local content requirement set for smartphones in the country. This policy was adopted to encourage domestic investment and economic self-sufficiency.
Indonesia’s investment policy and regulatory requirements
On October 25, the Indonesian Ministry of Industry published a statement stating that PT Apple Indonesia did not meet the specified local content conditions. The Indonesian government has devised a set of investment thresholds and guidelines for global investment. It aims to attract international corporations to actively participate in the national economy by manufacturing and sourcing parts locally.
According to reports, Apple invested nearly 1.5 trillion rupiah or about $95 million into Indonesia. However, the company has not met the 1.7 trillion rupiah it pledged to invest. The firm has concentrated on building developer academies in the region but still does not have local manufacturing facilities, which are quite critical for compliance with Indonesian regulations.
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Sales impact and market potential
The ban comes at a time when Apple is facing high demand for its products across the world, particularly in larger markets such as China. In Indonesia particularly, there are over 270 million citizens and more than 350 million active mobile phone users.
Currently, there are 9,000 units of iPhone 16 entering Indonesia through personal imports or post by travelers. However, these phones can only be used but cannot be sold commercially. Therefore, that potential market cannot be exploited by the company.
Hence, as Apple looks to recover from this set back, it may be forced to adjust its investment strategy in Indonesia. The ability to set up local manufacturing operations will be able to help the company meet this regulatory requirement and get a better competitive position in the market.