Indonesia has prohibited Apple Inc. from selling its latest iPhones within the country due to unmet local investment requirements. The Ministry of Industry stated that the iPhone 16, released in September, does not meet the 40% domestic content requirement necessary for smartphones and tablets to be marketed in Indonesia. Apple’s older products remain available for sale.
This decision poses a challenge for Apple, which has recorded strong initial sales of the iPhone 16 in other Asian markets, including China. Although Apple does not rank among the top six smartphone brands in Indonesia, the country presents a potential growth opportunity with its youthful, tech-savvy population. Government data indicates Indonesia has a $1 trillion economy and over 350 million active mobile phones, exceeding its population of 270 million.
Earlier in October, the industry ministry reported that Apple has invested 1.5 trillion rupiah ($95 million) in Indonesia, which falls short of its pledged 1.7 trillion rupiah. Instead of establishing a manufacturing facility, Apple has constructed four developer academies in the country. CEO Tim Cook suggested in April that the company is assessing the feasibility of local production.
Apple did not immediately respond to a request for comment.
Competitors like Samsung Electronics Co. and Xiaomi Corp. have already established factories to comply with Indonesia’s domestic content regulations, implemented in 2017. These regulations can also be satisfied by sourcing materials locally or hiring local employees.
Indonesia has historically employed trade restrictions to encourage foreign companies to manufacture more goods domestically, with varying levels of success. This year, the government tightened import rules, resulting in shortages of products like laptops and car tires, and causing congestion at ports. However, the long-standing ban on the export of mineral ores, such as nickel, has spurred growth in the country’s battery sector.
Approximately 9,000 iPhone 16 units have entered Indonesia, carried by travelers or shipped by post. These are strictly for personal use and cannot be traded. Additionally, all phones bought overseas must be registered with the government and are subject to substantial taxes, making the process of obtaining an iPhone 16 more challenging for local buyers.