Apple Offers $100 Million Investment in Indonesia to Lift iPhone 16 Ban

Apple AAPL 0.32%increase; green up pointing triangle has proposed investing $100 million in Indonesia after the country banned sales of its latest iPhone 16 handsets over what officials say is the company’s nonfulfillment of local investment requirements.

The amount the U.S. tech giant has offered is 10 times higher than an initial plan to invest $10 million to build an accessories and components factory in Bandung, West Java, the Ministry of Industry said in a statement Wednesday. The $100 million would be invested in over the next two years.

Ministry of Industry spokesperson Febri Hendri Antoni Arif said a meeting will be held Thursday to discuss the proposal.

“We certainly appreciate Apple’s intent as stated in the proposal,” he said.

However, the company still needs to meet its earlier investment commitment of 300 billion rupiah, or $18.9 million, to meet local content requirements, the ministry said.

“This is not just about the investment amount but also about ensuring fairness for all investors and maintaining a level playing field between Indonesia and other nations. This will contribute to a conducive business climate in Indonesia,” Febri said.

Apple didn’t immediately respond to a request for comment.

Indonesia blocked sales of Apple’s latest iPhone 16 handsets in October after officials said its local unit, PT Apple Indonesia, had not fulfilled an investment commitment required to obtain a license to sell the new iPhone model in the Southeast Asian country. Apple’s other products aren’t subject to the ban.

Under an Indonesian policy aimed at supporting domestic industries and reducing dependence on imported products, companies have to meet set requirements for using goods or services sourced from within the country. This can be done via various means, including manufacturing products, building factories or developing innovations domestically.

Apple has previously chosen the innovation development scheme by building three developer academies, the ministry said Wednesday.

Google’s Pixel phones had also been banned for not meeting the requirement, the ministry said in October.

The ministry noted that Apple phone sales in Indonesia reached 2.61 million units last year, the highest in Southeast Asia. That compares to the 1.43 million units sold in Vietnam.

“Apple’s estimated revenue from sales in Indonesia stands at around IDR30 trillion,” Febri said when addressing the level of investment needed to develop Indonesia’s digital technology economy.

The Ministry of Industry outlined key requirements for Apple to continue selling its products, which include establishing a much larger research-and-development division in Indonesia and integrating Indonesian companies into its global value chain.

The cellphone market in Southeast Asia’s largest economy is a lucrative one, benefiting from a large, growing population with rising disposable incomes.

There are an estimated 354 million devices in active use in Indonesia, according to the ministry. That compares with a national population of about 270 million, according to World Bank estimates.