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In an effort to address the recent ban on the iPhone 16 in Indonesia, Apple has significantly increased its manufacturing investment proposal from $10 million to an impressive $100 million. Update: The Indonesian government has indicated that it anticipates further investments – more details provided below.
The Indonesian government took firm action after Apple did not meet its previously promised budget for local investment, and the tech giant appears determined to find a resolution.
Understanding the iPhone 16 Ban
Indonesia has adopted a strategy similar to that of India by requiring Apple to set up manufacturing operations within its borders before the company can freely market its devices there.
In India, Apple faced restrictions on launching both online and physical retail shops until it established significant assembly activities in the country. This initiative has paid off, with India now being Apple’s second-largest manufacturing hub, following China.
Apple initially proposed investing around $109 million to fund developer academies alongside a $10 million commitment to local manufacturing over a two-year span. While this was initially accepted, the government later noted that Apple only spent $95 million on the developer programs, which prompted the sale ban of the iPhone 16.
The Indonesian government has also implemented a similar ban on the sale of Google Pixel smartphones for analogous reasons.
Apple’s Increased Commitment to Manufacturing
Bloomberg reports that Apple’s latest offer entails ramping up its local manufacturing investment from $10 million to a whopping $100 million, contingent on the government lifting the sales ban on iPhones.
Sources indicated that this proposal would see Apple invest close to $100 million in Indonesia’s economy over the next two years. Previously, the company’s $10 million investment plan was focused on establishing manufacturing for accessories and components in Bandung, a city located southeast of Jakarta.
This strategic move aims to grant Apple unrestricted access to Indonesia’s vast market of 278 million consumers, more than half of whom are under the age of 44 and are tech-savvy.
“From the government’s viewpoint, we absolutely welcome a larger investment,” remarked ministry spokesperson Febri Hendri Antoni Arif this past Thursday.
This isn’t the first instance where Apple has needed to assure investments to continue selling iPhones in Indonesia; a similar situation occurred back in 2017.
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