In an effort to resolve the current sales ban on its iPhone 16 series in the country, Apple has significantly raised its investment offer to Indonesia at $1 billion. The offer was disclosed by Indonesia’s investment minister Rosan Roeslani after the government imposed a ban in October over Apple’s failure to meet the country’s 40% domestic content requirement for smartphones.
Addressing local content requirements
Roeslani said that the government is expecting an in writing commitment from Apple by next week regarding the investment. The $1 billion proposal is being termed as the “first phase” of Apple’s possible investment in Indonesia. This offer has come much higher than what Apple had proposed initially, which were rejected by the government. Apple first proposed a $10 million investment, then a $100 million offer that came with research and development facilities and developer academies.
The Indonesian government would prefer a deeper involvement by foreign firms, such as Apple Inc., with the local economy, notably through local manufacturing and also in sourcing their components at home. “Whoever profits from the sales must invest here, create jobs here,” she emphasized, mirroring this goal of the government.
Apple’s investment strategy in Indonesia
Although Apple has had its developer academies in Indonesia since 2018, the country doesn’t host any manufacturing facilities. Under the new offer made by Apple, local manufacturing partnerships and sourcing of components will be possible within the country to meet the 40% local content requirement.
Although Indonesia will finalize the specific details of the investment, Apple’s boosted offer appears to align with the country’s regulatory ambitions. Anyway, the firm has yet to say about the particular details of the new deal.
RELATED
The impact of the ban on Apple’s operations
The ban on selling the iPhone 16 has confronted Apple with some challenges in one of the Southeast Asia’s largest markets for smartphones. Solving the problem and satisfying government requirements will be a step closer to entering back into the market and continuing its operations in the region.
The conclusion of this agreement may affect Apple’s activities in this market and maybe other comparable markets in Indonesia due to the local content restrictions of similar markets.