Apple Inc. has proposed an additional investment of nearly US$10 million (approximately Rp157 billion) in Indonesia to address the regulatory hurdles hindering the sale of its iPhone 16. Sources familiar with the matter revealed that this investment is aimed at supporting a local manufacturing facility and satisfying the country’s domestic content requirements, which have delayed the launch of the iPhone 16 in the Indonesian market.

The Indonesian government, through the Ministry of Industry (Kemenperin), has yet to issue the necessary certification for the iPhone 16 under the Tingkat Komponen Dalam Negeri (TKDN), or Domestic Component Level, regulation. As a result, the sale of the latest iPhone model has been blocked in Indonesia until Apple meets the required 40% TKDN threshold for smartphones and tablets.

Apple’s proposed investment will focus on establishing production capabilities for accessories and components related to Apple products. This initiative is expected to involve partnerships with local suppliers in Indonesia, specifically in a factory located in Bandung, West Java. The company aims to meet the government's demand for higher local content in production, in line with Indonesia’s industrial development goals.

Sources have confirmed that Apple has formally submitted its investment proposal to the Ministry of Industry, but the decision is still pending. The Indonesian government is considering the proposal, although officials cautioned that the outcome could change based on further deliberations. Both Apple and the Ministry of Industry have refrained from publicly commenting on the matter.

This move is part of a broader push by President Prabowo Subianto’s administration to attract foreign investment into Indonesia's manufacturing sector. Encouraging multinational companies like Apple to establish more substantial operations in the country is a key part of Indonesia's economic strategy. However, despite previous investments, Apple has yet to fully fulfill its initial commitment of Rp1.7 trillion, a factor that has contributed to delays in the iPhone 16’s approval.

In an ongoing effort to protect the domestic market, the Indonesian government has also targeted other foreign tech companies. Alphabet Inc., the parent company of Google, faced similar challenges when its Google Pixel devices were blocked for failing to meet the TKDN requirements. This reflects the government's stringent stance on foreign brands that do not meet local production or content standards.

Apple, which currently does not operate its own manufacturing plant in Indonesia, relies on local suppliers to produce components and finished goods. The US tech giant’s proposed investment of nearly US$10 million would be a relatively small price to pay for greater access to Indonesia's market, which boasts a population of over 278 million with a large segment under 44 years old and highly tech-savvy.

While an additional investment from Apple could be seen as a win for Indonesia, the government’s tough stance raises concerns about whether it could discourage other multinational companies from expanding their operations in the country. In particular, firms looking to shift production away from China may be wary of such regulatory pressures.

The Indonesian government has been clear about its intentions to enforce its import regulations, including the deactivation of International Mobile Equipment Identity (IMEI) numbers for devices found to be in violation of the country's regulations. Apple’s ability to comply with the TKDN requirements could unlock the iPhone 16 sales and potentially pave the way for further investments in the country.

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