Apple Allowed to Sell iPhone 7 in Indonesia After $44 Million R&D Investment Pledge

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A $44 million investment pledge in an Indonesian R&D center has paved the way for Apple to be able to sell the iPhone 7 in the country, according to one of the country's senior government officials.

A director-general overseeing electronics told Reuters that as a result of the three-year investment commitment, Apple had received a "local content certification" last month which would allow it to sell iPhones throughout Indonesia.

jakarta-indonesia

Jakarta, Indonesia

"Apple has committed around $44 million to invest in R&D over three years," I Gusti Putu Suryawirawan said in a text message. "Therefore, they can distribute devices priced 6 million rupiah ($448) and above. That means all iPhones can be distributed."

Starting from 2017, Indonesia will introduce a telecommunications policy which stipulates that all 4G handsets sold in the country must have "local content" of at least 30 percent, whether that be in terms of hardware, software or an investment commitment.

Asked by Reuters to comment on the investment figure, Apple merely pointed to an announcement last year that it had committed to building an iOS App Development Center in the country.

Such an R&D investment apparently fulfills the government's "local content" requirement and will help Apple make significant inroads in the Indonesian market, which is home to 250 million people and a young, tech-savvy demographic that Apple has yet to crack. In 2011, Apple was forced to shut down its online store in Indonesia because of shipping issues, and had to re-apply for permission to launch it again as part of its application to open its first retail store in the country.

According to research firm IDC, Samsung commanded a 26 percent share of Indonesia's smartphone market by sales volume in the second quarter of 2016, trailing Oppo with 19 percent. Both own factories in the country.

Top Rated Comments

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51 months ago
*bribe. Not investment.
Score: 7 Votes (Like | Disagree)
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51 months ago
Not surprised Apple has to pay bribes there. Indonesia is quite a corrupt country (http://www.transparency.org/country#IDN) - just compare it to the UK or US.
Having some friends who actually are from Indonesia and who has to pay a couple of $$ at the border to enter their own country without a hassle tells a story too. Also my ex-company has an office their. To keep the business running presents and dinners with local gov. officials was / is the norm.
Score: 2 Votes (Like | Disagree)
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51 months ago
Ok, now I see it. All these Apple "R&D" centers popping up all around the world are in reality just another time honored business deal of - you gotta pay to play.
Score: 2 Votes (Like | Disagree)
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51 months ago

I'll refer you to Carrier. Same thing happens everywhere. No one eats for free.

Not true. It happens lots of places. However Carrier is the reverse. The people bribed them like suckers to stay not the other way around.
Score: 1 Votes (Like | Disagree)
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50 months ago

I think desktop innovation in the computer era these days is tough. How much faster or more powerful are they going to make these things yoy!

Ahead Warp Factor 8! :D
Score: 1 Votes (Like | Disagree)
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51 months ago

Apple is not allowed to sell their products as per the law. They can sell iPhone 7 for now but to sell iPhone 7s they will have to fulfill their commitment. Law cannot be compared to bribery. Why other countries should allow access to their markets with out investing in their country or people? Companies have to respect the law of land. We might see apple products designed in Indonesia soon. If a global economic power like US is turning protectionist it is not fair to find fault with other countries.

Indonesia is a corrupt country. Anyone who does business there is essentially the govt's b*tch. Read up.
Score: 1 Votes (Like | Disagree)

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