Apple faces sales ban in Indonesia over investment failures
- Apple's iPhone 16 cannot be sold in Indonesia due to failure to meet local investment commitments.
- The company has only invested 1.5 trillion rupiah instead of the pledged 1.7 trillion, while older models remain on the market.
- This situation presents challenges for Apple in a growing market, emphasizing the importance of local compliance for success.
Indonesia has imposed a ban on the sale of the iPhone 16 due to Apple's failure to meet local regulations. The Ministry of Industry announced on October 25, 2024, that Apple’s local unit, PT Apple Indonesia, has not satisfied the domestic content requirement of 40% for smartphones. Apple has only invested 1.5 trillion rupiah ($95 million) in the country, falling short of their promised commitment of 1.7 trillion rupiah, leading to the prohibition. While Apple's older products remain available, this restriction hampers the launch of its latest flagship device in the rapidly growing Indonesian market. Indonesia's young, tech-savvy population represents a significant opportunity for Apple, despite the company being outside the top six smartphone brands in the region. The competitive landscape is challenging, as local competitors like Samsung and Xiaomi have established manufacturing facilities in compliance with Indonesia’s domestic content regulations introduced in 2017. Over 9,000 units of the iPhone 16 have entered the country through personal means, but these can only be used privately and not sold further. Since 2020, all imported phones must be registered and taxed heavily, complicating the purchasing process. Apple’s CEO has expressed interest in exploring local manufacturing options, a necessary step if the company intends to expand its market share significantly in Indonesia amidst tighter regulations and competitive pressures.