As reported by Bloomberg today, sources familiar with the matter said the tech giant’s plan involves partnering with suppliers to establish a factory in Bandung, West Java, focusing on accessories and components for Apple devices.
The move comes in response to Indonesia’s Ministry of Industry blocking the iPhone 16’s sales permit last month, citing Apple’s failure to meet the mandatory 40% domestic content requirement for smartphones and tablets. The ministry is currently evaluating Apple’s proposal, with a decision expected soon.
Newly-elected President Prabowo Subianto’s administration has been pressuring international companies to increase local manufacturing in his first few weeks in charge. The strategy isn’t unique to Apple—Indonesia has similarly banned Google’s Pixel phones and previously pressured ByteDance into a US$1.5 billion joint venture with local e-commerce platform Tokopedia.
For Apple, which currently lacks standalone factories in Indonesia, the proposed investment represents a relatively modest cost to access a market of 278 million potential consumers, more than half of whom are under 44 and technologically engaged.
The company’s current investment in Indonesia, primarily through developer academies, stands at 1.5 trillion rupiah (US$125 million), falling short of its 1.7 trillion rupiah commitment.
While the government may view these forced investments as victories, the strategy might deter other companies from establishing or expanding operations in Indonesia, particularly as businesses seek alternatives to Chinese manufacturing.
