Apple trouble in Indonesia: With a billion from the iPhone 16 ban
Apple has not been allowed to sell its iPhone 16 generation in the world's fourth largest country for months. The reason was a dispute over investments.
Skyline of the Indonesian metropolis Jakarta.
(Image: leolintang / Shutterstock)
Apple is apparently on the verge of ending an economic dispute with the Indonesian government that has been smouldering for months. In October, an official ban was imposed on the latest generation of iPhones because Apple had allegedly failed to meet investment commitments. This only involved a relatively small amount of 13.5 million euros, which was missing from a total investment of around 100 million euros. However, the matter is now costing Apple significantly more: After several rounds of negotiations, the company appears to be prepared to invest one billion US dollars in the world's fourth largest country – currently has around 275 million inhabitants –, including in the form of new production lines.
AirTags from Indonesia
As the business news agency Bloomberg reported at the end of last week, Apple is prepared to invest one billion dollars to end the dispute. Apple had initially offered 100 million dollars, but this was not enough for either the Minister of Economy or the President. A government spokesperson said in November, after Apple's first deal fell through, that the country wanted to strengthen the local manufacturing industry and ensure that Indonesia became "part of Apple's global supply chain". Indonesia is not yet in a position to produce the semiconductors required by Apple. "But if Apple needs them, components could come from local suppliers," said the Ministry of Economy spokesperson.
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After further rounds of negotiations at a high level, the disputants have now apparently reached an agreement: President Prabowo Subianto has given his consent to accept Apple's billion-euro investment, according to informed circles. This includes not only educational programs and possible research locations, but also real production. One of Apple's manufacturers, who initially remained unnamed, will create 1,000 jobs to set up an AirTag production facility on the island of Batam, a good 45 minutes by boat from Singapore. There is a free trade zone there with no sales or luxury tax and no import duties. According to Bloomberg, Apple's plan is to locate up to 20 percent of global AirTag production in Indonesia. An improved second version of these is expected next year. The Bluetooth and UWB trackers sell in their millions and are inexpensive for an Apple product with a street price of just over 30 euros.
Accessories and educational programs
Other parts of the money from the billion-dollar pot are to flow into another Indonesian factory, this time in Bandung, three hours from Jakarta. "Other types of accessories" are to be built there. Finally, Apple will also launch training programs for coders. What other projects are planned initially remained unclear.
Despite the internal approval of the project by the Indonesian government, Apple has reportedly not yet received a timetable for when the iPhone 16 may be launched on the market. The company has lost some sales as a result: of the 275 million people in Indonesia, many are technology enthusiasts and half of the population is under 44 years old.
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