Apple's (AAPL, Financial) latest $1 billion investment offer to sell its iPhone 16 lineup in Indonesia has not satisfied the government's strict domestic content requirements, which have barred the lineup from sale in the country. Industry Minister Agus Gumiwang Kartasasmita in Indonesia on Wednesday said Apple's proposed investment was 'still not enough' to meet regulatory hurdles.
The ban, which went into effect in October, follows Apple's inability to give Indonesia what it wanted: 40 percent domestic content in smartphones. The country's government also noted a shortfall in Apple's previous pledge, which said it would invest 1.7 trillion rupiah (around $110 million) in developer academies but spent only 1.5 trillion rupiah.
Apple's latest bid is for a $1 billion package, in which it would build an AirTag production factory on Batam Island and introduce new research and development centers. But Agus clarified that AirTags production doesn't count as local content for iPhones.
Apple is banking heavily on becoming a key player in Indonesia, with 280 million dwellers and more than 354 million active mobile devices. It seems Apple continues to live on despite raising its investment offer dramatically from $10 million in October to $100 million in November, up to $1 billion, and it has still not settled the standoff.
The consideration of the proposed AirTag factory and later AirPods Max component production in the country by mid-2025 are small steps but insufficient to deliver Indonesia's dream to enhance domestic manufacturing. Both sides are making efforts to find a resolution before Apple's attempts to regain access to the market fall through.
