Apple is facing a major hurdle in the Asia telecom market as Indonesia has rejected its $100 million investment proposal to build an accessory and component plant because it deemed the offer insufficient to meet its local content requirements for selling the latest iPhone models in the country.
Indonesian law mandates that smartphones sold domestically must comprise at least 40 percent locally-made components. The Industry Minister, Agus Gumiwang Kartasasmita, stated that the proposal failed to meet fairness principles, especially when compared to Apple’s more substantial investments in neighboring countries like Vietnam and Thailand, Reuters news report said.
Apple has invested nearly $16 billion in Vietnam since 2019, and has increased its spending and commitment to the country in recent years. Thailand is one of the major markets for Apple.
Indonesia is a major market for Apple. The leading smartphone brands in Indonesia in Q1 2024 were Oppo (21 percent), Xiaomi (19 percent), Vivo (17 percent), Transsion (17 percent) and Samsung (17 percent), according to Canalys.
Indonesia also cited Apple’s outstanding $10 million investment commitment from previous years and called for a stronger long-term investment plan extending until 2026. Apple is yet to comment on the development in Indonesia.
While Apple had previously established application-developer academies in Indonesia as part of its local content strategy for older iPhone models, this was not enough for the newer devices. The government has invited Apple to further negotiations to resolve the matter.
Similar bans have also affected Google Pixel smartphones, highlighting Indonesia’s enforcement of its domestic content policy.