Apple has failed to meet its investment commitments and needs to renew its local content licence, Indonesia’s government says
Indonesia is blocking the sale of Apple‘s latest iPhone, citing the tech giant’s failure to comply with local content regulations aimed at boosting domestic industry – frustrating eager consumers awaiting the new device.
The US multinational has yet to fulfil its investment commitments in Indonesia and must renew its domestic component level (TKDN) licence, Minister of Industry Agus Gumiwang Kartasasmita said last week.
“Apple’s iPhone 16 cannot be sold in Indonesia yet because the extension of the TKDN certification is still pending, awaiting further investment realisation from Apple,” Agus told reporters in Jakarta on October 8.
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Apple has only invested 1.48 trillion rupiah (US$95 million) in Indonesia, he said, “falling short of its total commitment” of 1.71 trillion rupiah.
The California-based tech giant has not yet met its promised investments through four research and development facilities in Indonesia, ministry spokesman Febri Hendri Antoni Arif told local news outlet Kumparan.
Apple’s new phone was officially launched on September 20, alongside a flurry of other products, but these new offerings remain unavailable in Indonesia.
The Southeast Asian nation has been pushing Apple to increase its local content by partnering with domestic firms. CEO Tim Cook said during a visit to Jakarta in April that the company would consider building a manufacturing facility in Indonesia, following a meeting with President Joko Widodo.
“We talked about the president’s desire to see manufacturing in the country, and it is something that we will look at,” Cook told reporters after the meeting.
Apple currently has no manufacturing facilities in Indonesia, but since 2018, it has been setting up research and development facilities, also known as developer academies, at a total cost of 1.6 trillion rupiah.
To sell its new phone in Indonesia, Apple must meet a 40 per cent TKDN value requirement.
“This is all based on fairness for investors who have shown strong commitment to investing in Indonesia,” industry minister Agus said.
With its large, tech-savvy population, Indonesia has become an attractive target market for tech investments. Following Cook’s visit, Microsoft CEO Satya Nadella announced a US$1.7 billion investment to enhance cloud and AI infrastructure in the country.
Cook highlighted Apple’s growing focus on emerging markets during an earnings call in May, noting that the company had “achieved an all-time revenue record in Indonesia”.
While most of Apple’s assembly is still done in China, the company has been looking to diversify its supply chain in recent years amid rising trade tensions between Washington and Beijing.
So far, Vietnam and India have emerged as key beneficiaries, but Indonesia is hopeful that Apple will follow through on its manufacturing plans.
For now, Indonesian consumers have been left frustrated by the unavailability of Apple’s latest products.
Jessica Wijanto, a 28-year-old interior designer based in Bandung, told This Week in Asia that it was “annoying” to have to wait longer to be able to buy the new iPhone.
“A lot of people still use Android or Chinese phones, but more and more of my friends are switching to Apple phones, it’s becoming more common in Indonesia,” she said. “So they should work with the government and make it accessible.”
Meanwhile, Renaldi Gunawan, a 27-year-old marketing professional from Jakarta, said he was unlikely to wait for the iPhone to be available locally.
“I have family or friends who will buy the phone [for me] in Singapore or in Hong Kong, and that is easier than waiting for it,” he said. “Sometimes the cost is better too because the import fee is high here.”
