Indonesia and the U.S. tech giant Apple have agreed on terms to lift the country’s ban on the sale of the latest model of iPhone, which involves a previously announced $1 billion investment in manufacturing facilities in the country.
According to a report published yesterday by Bloomberg, which quoted “people familiar with the matter,” Indonesia’s Ministry for Industry “is set to sign a memorandum of agreement with Apple as soon as this week.” The report added that the ministry “intends to issue a permit allowing iPhone 16 sales as soon as possible.”
Jakarta announced the ban in October, on the grounds that Apple had failed to fulfill its local content requirements, which require certain smartphone handsets to contain at least 40 percent locally manufactured components. The purpose of the local content rules is to force foreign companies to make substantial investments that transfer technology to Indonesia and create high-quality jobs. Jakarta also banned Google’s Pixel smartphones on the same grounds.
Apple has since made a number of attempts in a bid to rescind the iPhone 16 sales ban, which threatened to lock it out of the world’s fourth-largest mobile phone market. It initially offered to invest $100 million in building an accessory and component manufacturing plant in the country, but the Indonesian government said this was insufficient. Apple then promised to invest $1 billion, including in an AirTag production facility on the island of Batam, which is expected to begin operations in 2026. While Indonesia welcomed the investment, it said that this was also not enough to reverse the iPhone ban, with Industry Minister Agus Gumiwang Kartasasmita pointing out that AirTag production “has no direct relations” with the manufacturing of iPhones.
Earlier this month, Nikkei Asia reported that Apple was exploring the possibility of manufacturing iPhones in Indonesia, a development that “would mark Apple’s first-ever iPhone production in the Southeast Asian nation, where it has almost no supply chain ecosystem.”
According to the Bloomberg report, Apple “has no immediate plans to start making iPhones in the country.” However, in addition to the previously announced $1 billion investment, which also includes a plant for the manufacture of Apple components in Bandung, Apple has agreed to “training locals in research and development on the company’s products so they can then develop similar software and design their own goods.” Bloomberg added that this training, which would take place in addition to the existing Apple academies in the country, had succeeded in fulfilling the Indonesian government’s desire to derive more substantial benefits from the tech firm’s investments in the country.
While Apple made up just 7.3 percent of smartphone sales in Indonesia in January, well behind South Korea’s Samsung and China’s Oppo, Xiaomi, and Vivo brands, it stands to benefit a lot from regaining access to the massive Indonesian market.
The reported deal also shapes as a domestic political victory for Indonesian President Prabowo Subianto, showcasing his ability to extract concessions from one of the world’s most powerful companies. At the same time, the fact that Apple has seemingly not conceded on the main Indonesian request – that it set up iPhone manufacturing facilities in the country – suggests that the victory is more partial than it might appear at first glance.