Apple blocked from selling iPhone 16 in Indonesia over content rules
- Apple's inability to sell its iPhone 16 in Indonesia stems from non-compliance with the country's domestic content regulations.
- The local content law requires that smartphones contain at least 35% locally-produced components, which Apple has failed to fulfill.
- The ongoing issue presents a significant challenge for Apple as it seeks to penetrate a large, competitive market.
In Indonesia, Apple remains unable to sell the iPhone 16 after being banned due to non-compliance with local content regulations. These regulations, which mandate that smartphones sold in the country have at least 35% of their components made locally, led to the ban in 2024 after Apple failed to meet the criteria. Recently, the Minister of Industry, Agus Gumiwang Kartasasmita, stated that while Apple plans to build a facility on Batam Island to produce AirTags, it does not comply with the local content rules as it is unrelated to iPhone manufacturing. The investment value for the AirTag facility is pegged at around $1 billion, with operations projected to begin by early 2026. However, the Indonesian government has emphasized that producing accessories does not count towards the necessary local content certification required to sell smartphones. This situation acts as a significant roadblock for Apple, particularly as the Indonesian market holds great potential with around 280 million consumers. Apple's lack of manufacturing facilities in Indonesia puts it at a disadvantage, particularly as competing smartphone makers such as Samsung and Xiaomi have established local factories to comply with these domestic regulations enforced since 2017. Apple has offered innovative investment proposals, but the government insists that compliance with local content rules must be at the forefront for Apple to resume iPhone sales in the country. The ongoing negotiations highlight the complexities and challenges faced by multinational companies in navigating local laws and adapting to the demands of specific markets. Without meeting the local content requirements, Apple risks losing out on a lucrative market, especially in a region where it needs to contend with established rivals like Samsung. The government has indicated that further sanctions could be applied if Apple does not comply, prompting the company to continue discussions for a possible solution.