Apple and Indonesia Reach Deal to End iPhone 16 Ban

Apple and Indonesia have agreed on terms to lift the country's five-month ban on iPhone 16 sales, according to people familiar with the matter who spoke to Bloomberg. The deal concludes a battle that began in October, when Indonesia refused to issue permits for Apple's flagship iPhone lineup over Apple's failure to comply with domestic manufacturing requirements.

iPhone 16 Apple Store Levels
Under the agreement, Apple will invest $1 billion in Indonesia, a significant increase from its previous commitments of $10 million and $100 million that were rejected by the government. The deal is expected to be formalized through a memorandum of agreement to be signed as early as this week, with the Ministry for Industry issuing permits allowing iPhone 16 sales "as soon as possible."

Beyond the monetary investment, Apple has reportedly committed to training local talent in research and development, so that Indonesians can develop software and design their own products. The pledge addresses one of the government's key demands for Apple to establish R&D facilities in the country.

The agreement also includes plans for a manufacturing plant on Batam island that will produce AirTags, Apple's device tracking accessories. This facility will be operated by Apple supplier Luxshare Precision Industry, and is expected to eventually account for 20% of global AirTag production.

Another manufacturing facility is planned for Bandung, about three hours from Jakarta, which will produce other types of accessories. Part of the investment will also fund Apple academies to equip Indonesian students with tech skills like coding.

Despite the substantial concessions, Bloomberg's sources indicated that Apple has no immediate plans to manufacture iPhones in Indonesia.

The deal is a victory for Indonesian President Prabowo Subianto, who directed his ministers to accept Apple's $1 billion investment offer. However, the Ministry of Industry unexpectedly upheld the ban last month while seeking better terms, which have apparently now been agreed.

Indonesia's hardball approach seems to have paid off, securing significant investment from a major foreign company and supporting the government's goal of boosting local manufacturing rather than simply using the nation as a sales market.

For Apple, regaining access to Indonesia's market of 278 million people — over half of whom are under 44 and tech-savvy — comes at a crucial time as its sales in China have slowed. Apple may not be among the top five smartphone brands in Indonesia, but the market offers the company a lucrative growth opportunity.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Related Roundups: iPhone 16, iPhone 16 Pro
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Top Rated Comments

senttoschool Avatar
16 weeks ago
It's like how Trump does business.
Score: 7 Votes (Like | Disagree)
cicalinarrot Avatar
16 weeks ago
I'm not sure why most people on this site seems to assume that what's good for Apple is good for the world.

There seems to be a tendency, especially in the US, to self-identify with corporations, as if their freedom from governments were people's freedom.
In most situations, it seems to be the exact opposite: it's completely private interests (in this case foreign interests, if you can put yourself in Indonesians' shoes for a second) Vs. something that should represent the whole country (either it does in a good or bad way, it's surely more on Indonesians' side than Apple).
Score: 5 Votes (Like | Disagree)
Skyscraperfan Avatar
16 weeks ago
The problem with those huge corporations is the they can send bills from one local branch to another one to save taxes.

Starbucks for example charges their local branches huge sums of money for using the Starbucks name and logo for example, although those branches are 100% owned by their mother company. That costs can be deducted as an expense in a high tax company like Germany. I wonder if Apple does the same trick.

All those companies ask for is that the net revenue that in generated locally is also taxed locally. Apple has a huge profit margin and it should not be able to shift taxes from high tax countries to low tax countries where they did not occur at all or even to countries like the UAE who do not have any corporate taxes.

Indonesia is a very poor country with huge problems. I spent six days in Jakarta last year. It has a few very modern and wealthy districts in the city center, but most of the rest of the city is slums. I am glad they are tough on giants like Apple.
Score: 4 Votes (Like | Disagree)
wanha Avatar
16 weeks ago
I'm generally not a fan of countries doing these type of "negotiations", but I'm also aware that large multinational corporations are designed to pump as much profit out of economies as possible, leaving those economies withering and less able to deal with whatever problems arise, because they capture so little of the value.

This is not just a tech thing, but the way in which more and more industries operate, and it's a problem.
Score: 3 Votes (Like | Disagree)
twintin Avatar
16 weeks ago
Will be tough time for Apple to keep up if other countries follow with similar demands (US, Indonesia, India, who else will follow). :)
Score: 3 Votes (Like | Disagree)
StuBeck Avatar
16 weeks ago

They must have really wanted that market, when they only missed the original investment requirement by like a million dollars, now they have to pay 1000x as much.
Sets a very dangerous precedent, as we know Apple will pass that cost on to other markets, and other markets will start asking for the same or better investments.
With the profits Apple makes, there is no need for them to pass along the low cost of their new investment. There also are only 3 countries with a larger population than Indonesia, so I don't think there can be much concern of "better" investments being required everywhere.
Score: 1 Votes (Like | Disagree)