The Indonesian government expects Apple (AAPL, Financial) to invest $1 billion in the country to solve the existing ban on the iPhone 16. The ban was made following its failure to conform to a rule that AppleStore provides at least 40% of the smartphone components used in Indonesia. Applicants cannot meet local content regulations as they do not have manufacturing facilities in Indonesia.
The Indonesian government has said that this $1bn investment could cater to Indonesia's needs, provide a way for Apple to form a supply chain in the country, and create employment. In the first half of this year, the government turned down Apple's $100 million investment to set up an accessories and components plant, saying it was substandard.
Today, Apple has no manufacturing plant in Indonesia, but it started application developer academies there; thus, older iPhone models can still be imported and sold in Indonesia. With the company aiming to decentralize its supply chain from China, Indonesia's pursuit of more investment has become a key point for Apple in Southeast Asia.
