This week, the Indonesian government brought into effect a ban on the sale and use of Apple"s iPhone 16 models. The Ministry of Industry said that this was a response to Apple"s failure to meet promised investment targets.
Apple had pledged to invest $109 million in infrastructure and local sourcing facilities in Indonesia. It had invested approximately $95 million so far, thus leaving a deficit of $14 million according to government figures. Its Ministry, for this reason, hasn"t issued the necessary permits for the new iPhone models to be legally sold in the country.
The investment promises were part of Indonesia"s local content rules, which require foreign technology companies to source 40% of the component locally. Apple has committed to establishing research centers and manufacturing units or academies, as the company refers to them. Still, not much has reportedly been achieved.
The ban includes any iPhone 16, whether newly purchased or already in Indonesian residents" possession. Tourists visiting the country also cannot use these devices on local networks during their visit, and if they do, the phones will be seized or reported to higher authorities.
"We, the Ministry of Industry, are yet to be able to issue permits for the iPhone 16 because there are still commitments that Apple must realize," said Industry Minister Gumiwang Kartasasmita. "If there is an iPhone 16 that can operate in Indonesia, that means that I can say, the device is illegal. Do report it to us."
Indonesia is not a significant market for Apple, ranking outside of the top five smartphone brands. However, it remains to be seen as to whether Apple is going to take care of the shortfall or contest Indonesia"s figures and enforcement action. How Apple resolves the investment issue could impact its longer term strategy to expand smartphone sales across Southeast Asia.
Source: The Register