A few weeks back, the Indonesian government took a stand against Apple’s newest flagship device—the iPhone 16, blocking its sale and use over a missed investment target Apple had promised. Now, it looks like Apple’s scrambling to fix things, hoping a little cash might smooth things over.
According to the South China Morning Post (SCMP), Apple is now discussing a $10 million (about 157 billion Indonesian Rupiah) investment plan to lift the ban. Rumor has it that part of this cash would go towards a new factory in Bandung, Jakarta, in partnership with its suppliers. Whether this will be enough to win back Indonesia’s approval isn’t clear, but the country’s leaders are still deciding.
Apple isn’t alone in this tough spot—Google is also affected. Indonesia’s rules require that smartphones and tablets meet a “40% local content” standard, which the Google Pixel phones didn’t meet either, leading to a similar ban. However, while Google seems to be keeping quiet, Apple is in high gear. Losing this market could hit Apple harder than Google since it has a bigger brand presence.
This pressure on foreign companies to invest locally isn’t new. President Prabowo Subianto is continuing the previous government’s push to boost local manufacturing by setting high requirements for international brands. SCMP, though, warns that this ban-first, invest-later approach might scare off companies instead of encouraging them.
Earlier this year, Indonesia tried something similar by limiting imports of certain items, like tires, to make foreign brands invest more locally. But this didn’t sit well with companies like LG Electronics, which said the restrictions made it harder for them to manufacture things like washing machines and TVs.
Despite these efforts, Indonesia’s local manufacturing has been shrinking over time—its share of the economy fell from 21.1% in 2014 to 18.7% last year. Only time will tell if these strategies help or hurt.
4 Comments - Add comment