As you know by now from reading our coverage of the story, Indonesia has banned sales of the iPhone 16 line in the country. The Indonesian government wants smartphones sold in the country to have 40% of the components used to make each unit sourced domestically. Apple has offered to invest $100 million in Indonesia to build a factory to produce smartphone components if the ban is lifted but it appears that the government has a higher figure in mind.
The latest report states that the Indonesian government wants $1 billion from Apple to lift the iPhone 16 sales ban. While it might feel like a ransom demand, the country says that with $1 billion Apple could build a local supply chain that would kill multiple birds with one stone. It would allow Apple to meet the 40% local content requirement by using parts made domestically, and this would help create jobs and raise employment levels in Indonesia.
Indonesian phone store Erafone inside a shopping mall. | Image credit-Grand Indonesia
Apple doesn’t own or contract with any manufacturing facility in Indonesia but has started academies that train aspiring app developers in the country. But returning to the idea of an Indonesian supply chain, it is no secret that Apple has been looking to move production of its devices, including the iPhone, out of China. With President-elect Donald Trump already talking about imposing a 10% tariff on imports from China, Apple might feel the pressure to expedite the process of moving more iPhone production to other countries.
While some iPhone 16 series units are produced in India, there has been speculation about Apple turning to a country in Southeast Asia such as Vietnam to assemble future iPhone models. Indonesia is in the same region; while Apple might feel positive about building future iPhones in the country, the tech giant might not be too keen about making a $1 billion investment in a manner that feels more like blackmail. Imagine if other governments threatened to ban the iPhone unless Apple met a demand to invest $1 billion to build a supply chain in their countries.
We should point out that sales of the Pixel 9 series have also been banned in Indonesia for the same reason. Indonesian iPhone fans can still buy an iPhone 16 series model but will have to purchase the device from Singapore tacking an import fee onto the price. Thus, an Indonesian consumer looking to buy the base iPhone 16 handset priced at S$1,299 ($994) in Singapore will have to pay an additional $155 to bring the device to Indonesia.
