Apple proposes Indonesian factory in bid to reverse iPhone 16 ban

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Apple has proposed spending $100mn on an Indonesian manufacturing facility, after the south-east Asian country’s government banned the sale of its latest iPhone over the level of its local investment.

The US company has offered to build an accessories and components factory in Bandung, West Java, the industry ministry said in a statement. Apple had initially offered to invest $10mn, it added.

Indonesia imposed a ban on iPhone 16 models last month, citing Apple’s failure to meet requirements for 40 per cent local content in handsets and tablets. Google’s Pixel phones had also been banned for not meeting the rule.

The ministry said it “welcomed Apple’s investment commitment” and is set to hold a meeting on Thursday to discuss the proposal. Apple did not immediately respond to a request for comment.

Indonesia has long used trade regulations to attract foreign investment and onshore manufacturing to boost local industries. Some have criticised the rules as protectionist, and the local content requirement — which varies across industries and calls for a certain percentage of goods to be sourced within the country — has deterred some investors.

However, the ban on Apple — which came soon after Prabowo Subianto took over as Indonesia’s president — appears to be having an effect.

The world’s fourth most populous country is potentially a huge market for Apple products. The number of active mobile phones in Indonesia totals 354mn — exceeding the population of about 280mn, the industry ministry has said.

In October, Jakarta said Apple had fallen short of an original commitment to invest Rp1.71tn ($107mn) in the country and had only invested Rp1.48tn so far.

Indonesia had previously called for more investment from Apple, which does not have any manufacturing facilities in the country.

The company has established four developer academies in Indonesia to train students and engineers to develop apps, but the government said this was not enough.

When Apple chief executive Tim Cook visited Jakarta earlier this year, the then president Joko Widodo had asked it to set up a manufacturing plant, though Cook did not make any commitments.