Apple Inc. (AAPL.US) invests $1 billion to lift Indonesia ban, iPhone 16 series sales affected

Indonesia has banned the sale of Apple Inc.'s iPhone 16 series, citing the company's failure to meet investment requirements for its $1 billion AirTag factory in the country. During a briefing on Wednesday, Indonesian Minister Agus Gumiwang Kartasasmita stated that, according to local content rules, Apple Inc. is required to produce some smartphones or components domestically in Indonesia, and the AirTag is considered only an accessory and does not meet the standards. Earlier, Indonesia's Ministry of Industry was scheduled to hold a crucial meeting with Apple Inc. on Tuesday, focusing on the company's investment plans in Indonesia, seen as a necessary step for Apple Inc. to launch its new iPhone 16 series in the Indonesian market. The Indonesian government had revealed that Apple Inc. intended to invest $1 billion to establish a factory in Indonesia dedicated to producing smart phones and other electronic product components. It is worth noting that the Indonesian government requires Apple Inc. to make a new investment commitment every three years, with the previous $10 million commitment expiring in 2023. In order to comply with Indonesia's localization requirements, Indonesia is actively seeking a new investment commitment from Apple Inc. for the period of 2024 to 2026. However, as of Wednesday afternoon, the government had not issued the local content certificate required for Apple Inc. to sell flagship devices in Indonesia, emphasizing the need for further negotiations with the company. Kartasasmita also revealed that if Apple Inc. continues to violate local investment rules, it may face sanctions, but the government will prioritize other solutions and has provided counter-proposals to Apple Inc. Investment Minister Bahlil Lahadalia added that Apple Inc. had proposed to build a factory specializing in producing AirTags, devices used to track items such as luggage and pets, in early 2026. Currently, Apple Inc. executives are in Jakarta negotiating with the government on the investment proposal in hopes of lifting the ban on the iPhone 16 series implemented in October. Looking back on last year, Apple Inc. faced a sales ban for its iPhone 16 series in Indonesia due to not meeting the government's requirement of at least 40% local components in smartphones. Despite not having established a production factory in Indonesia, a country with a population of 280 million, Apple Inc. has been investing in app developer academies in Indonesia since 2018, indicating its long-term commitment to the region.