Indonesia Wants Larger Apple Investment to Lift iPhone 16 Ban

The Indonesian government is pushing Apple for a higher investment than its recently proposed $100 million before it will consider lifting its ban on iPhone 16 sales in the country, according to statements from government officials on Thursday.

iphone 16 design
Industry minister Agus Gumiwang Kartasasmita has held internal meetings to discuss Apple's proposal, but a ministry spokesperson reportedly said that the government expects more substantial commitments from the company.

"From the government's perspective, of course, we want this investment to be larger," Febri Hendri Antoni Arif told Antara News. The government is particularly interested in having Apple source components from domestic suppliers, suggesting this would create a "multiplier effect" for local employment.

Apple's current $100 million proposal was a significant increase from its initial $10 million offer earlier this month, and includes plans for research and development facilities and developer academies in Bali and Jakarta over a two-year period. The proposal also outlines plans to manufacture AirPods Max ear cup mesh components in Bandung starting July 2025.

The ongoing negotiations follow Indonesia's October 28 ban on iPhone 16 sales, implemented after authorities determined Apple had not met the country's requirement for 40% domestic content in smartphones. The government also claims Apple has invested only $95 million through developer academies, falling short of a previously promised $109.6 million commitment.

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Top Rated Comments

neuropsychguy Avatar
8 months ago
This is called extortion. As Darth Vader once said: "I am altering the deal. Pray I don't alter it any further."

Edit: My comment is a bit hyperbolic, but the Star Wars quote is accurate because the Indonesian government has the power to alter deals at will. Apple does as well with suppliers so in other situations Apple might be viewed as the Empire. I'm just focusing on the current situation between Indonesia and Apple.

In any case, I think there are better ways at growing economies than simply requiring certain businesses (e.g., Google, which was also affected) to locally manufacture and source products. Included with this is that there are better ways to incentivize individuals and businesses. For example -- if a business meets a certain target for local manufacturing or research or support, there can be tax or other incentives. That's a form of positive reinforcement. What the Indonesian government is doing is a form of negative punishment, which is not good for long-term relationships. Governments and businesses and individuals need good working relationships for all to thrive. The EU, as an aside, is effectively using negative punishment with its regulations. That is, in my opinion, the wrong way to work with people and businesses. Regulations will usually have negative consequences but there are ways to incentivize through positive means rather than negative ones.
Score: 43 Votes (Like | Disagree)
I7guy Avatar
8 months ago
No different than the EU making the rules up as it goes along.
Score: 35 Votes (Like | Disagree)
contacos Avatar
8 months ago
This is quite literally extortion. Why should an US company building tech invest into a specific country (there are a lot of countries in the world, imagine everyone else starting to demand this).maybe just maybe, Indonesia is not producing anything they might need?

What stops other countries from doing the same.

"We are the experts of [...]! We demand you to invest in us, even if country X has more expertise in area Y!!!"
Score: 14 Votes (Like | Disagree)
hagjohn Avatar
8 months ago
Gov't bribery.
Score: 13 Votes (Like | Disagree)
WarmWinterHat Avatar
8 months ago

This is called extortion. As Darth Vader once said: "I am altering the deal. Pray I don't alter it any further."
It's protectionism, as are tariffs, which the US is about to implement in spades.

It's exactly the same thing, with different wrapping paper.
Score: 12 Votes (Like | Disagree)
CarAnalogy Avatar
8 months ago
It will be interesting to see where Apple draws the line here. Clearly they will just keep asking for more until Apple says no.
Score: 11 Votes (Like | Disagree)