Rejecting Apple's $100 million, Indonesia still bans iPhone 16 sales

Indonesia is asking Apple to invest more than the proposed $100 million to lift the ban on iPhone 16 sales.

"Industry Minister Agus Gumiwang Kartasasmita has held an internal meeting to discuss the proposal. From the government's perspective, we of course want this investment to be bigger," Febri Hendri Antoni Arif, a spokesman for the Indonesian government, told local newspaper Antara News on November 22.

An iPhone user in front of an Apple store in Shanghai in 2018. Photo: Reuters

Under Indonesian regulations, smartphones must contain at least 40% locally produced components. The Local Content Law can be mitigated through a variety of methods, such as innovation development programs that Apple has undertaken in the past. However, the company’s previous investment of only $95 million falls short of its commitment of $109.6 million.

Indonesia warned Apple on October 11, 2024 that the company could face a ban on selling the iPhone 16, and did so on October 28. On November 5, Apple offered to invest $10 million to remove the ban, but was rejected.

The company further increased its offer by 10 times on November 19. Apple’s planned investment of $100 million over two years will mainly go towards building research and development centers and developer training academies in Bali and Jakarta. In addition, Apple will also produce AirPods Max components starting in July 2025.

However, Indonesia wants a stronger commitment on the manufacturing side. “Although we cannot produce semiconductors yet, if Apple needs them, they can source components from local suppliers. This will have a double effect, especially in absorbing labor in Indonesia,” said Febri Hendri Antoni Arif.

The iPhone 16 sales ban and Apple 's proposals come after Tim Cook's visit to Indonesia in April. The Apple CEO met with then-President Joko Widodo and promised to consider the country as a manufacturing partner.