Citing the Indonesian government’s announcement, Bloomberg reported on the 3rd (local time) that Apple has offered an investment of 1 billion dollars, which is 100 times more than originally planned, to Indonesia, which imposed a ban on the sale of iPhone 16 due to lack of investment in the country. Earlier, Apple reportedly made an investment proposal of 100 million dollars, but raised the white flag and increased it by 10 times when the Indonesian government claimed that it was too little.
Indonesian Investment Minister Roshan Roslani told lawmakers that the Indonesian government and Apple have proposed 1 billion dollars as a “phase one investment.” He added that he expects to receive a written commitment from Apple headquarters within a week.
If the proposal is finalized, it will be a 10-fold increase from Apple’s last offer of 100 million dollars. Earlier, the Indonesian government banned the sale of the iPhone 16 on the grounds that Apple failed to meet the domestic content requirements for smartphones and tablets. To protect the domestic manufacturing industry, Indonesia does not issue domestic component level certificates to mobile and tablet PCs that account for less than 40 percent of components made in the country, and if the certificate is not received, local product license will not be granted. Overseas imports are also banned. If this condition is not met, the company has to invest as much as 40 percent of components. To overcome such regulations, Samsung Electronics and Xiaomi of China have set up factories in the country to produce products.
Apple, which was banned from selling the iPhone 16 due to its failure to meet the requirements, reportedly promised to invest 10 million U.S. dollars in parts and factories outside Jakarta in early November. However, the Indonesian government bristled at the request, saying that the amount was too small, and Apple increased its investment by 10 times to 100 million dollars on May 21. Despite Apple’s surrender to the white flag, the Indonesian government maintained that Apple is investing more than 15 billion dollars in Vietnam, saying that it is “too small.” It also urged Apple to increase its investment by emphasizing that it is selling about 2.5 million iPhones in the country but only 1.5 million in Vietnam. Analysts say that Apple, which cannot give up its potential market in Indonesia, the world’s fourth-largest population, eventually surrendered.
Meanwhile, Bloomberg reported that the top priority for Indonesian bureaucrats is still for Apple to set up a production plant in the country. “If Apple manufactures devices locally, it will have a ripple effect on investment across related sectors and create more jobs,” Minister Roslani said. “Most importantly, the global value chain moves to us as well.”
JULIE KIM
US ASIA JOURNAL
