What if we told you that the latest and greatest iPhone 16 models have been banned in Indonesia for almost a month now—and will remain so for the foreseeable future—as the country has rejected Apple‘s offer to lift the ban? The ban exists due to non-compliance with local investment requirements. Apple has attempted to address this by proposing a $100 million investment, but the government of Indonesia has rejected the offer, which amounts to IDR 1.5 trillion. But why the rejection? And what exactly does Indonesia want? Let us explain.
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Why Did Indonesia Reject Apple’s Offer?
Firstly, Indonesia has rejected Apple’s $100 million offer on the grounds that it isn’t fair. In the government’s eyes, based on a report by Social Expat, the Ministry of Industry, after assessing Apple’s investment offer, found it did not fulfill the “aspects of justice.”
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“For technocratic assessment, the ministry of Industry considers that the proposal submitted by Apple has not fulfilled the four aspects of Justice,” the Ministry of Industry said.
The Indonesian government’s stance is clear: Apple must increase its investment beyond $100 million. Until then, the iPhone 16 series will remain banned from being sold in the country.
Another requirement from the Indonesian government involves Apple setting up a production facility in Indonesia. This requirement is also based on the government’s fairness principles and is intended to eliminate the need for Apple to file an investment scheme every three years.
Additionally, Apple’s proposed investment is seen as lacking when compared to the commitments of competitors like Samsung and Xiaomi, both of which already have manufacturing facilities in Indonesia. The government expects Apple to similarly contribute to domestic production, employment, and revenue from imports.
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Apple’s History with Indonesia
Earlier this year, Apple CEO Tim Cook visited Indonesia and met the country’s leaders in a bid to open a manufacturing unit. However, Bloomberg reported that while Apple had previously committed to an investment of around IDR 1.5 trillion, it fell short of the agreed IDR 1.7 trillion target. Furthermore, Apple has yet to establish a manufacturing unit in Indonesia, unlike its competitors.
The pricing of iPhones in Indonesia is another area where Apple has faced flak. For instance, the base iPhone 15 Pro retailed at IDR 18,249,000, significantly higher than its US pricing.
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