Apple’s latest iPhone 16 remains banned in Indonesia, even after the company pledged a $1 billion investment in the country. Despite intense negotiations, Jakarta is standing firm, insisting that Apple must comply with local manufacturing regulations before its flagship device can return to the market.
A Standoff Over Local Manufacturing Rules
At the heart of the dispute is Indonesia’s domestic sourcing law, which requires at least 40% of smartphone components to be produced locally. Authorities argue that Apple has not yet met this threshold, preventing the company from obtaining the necessary national certification to sell its devices.
The restriction was first announced in October, when officials declared that the iPhone 16 lineup did not satisfy Indonesia’s local content requirements. Since then, Apple has attempted to negotiate a resolution, but Jakarta has yet to budge.
Apple’s $1 Billion Investment—Not Enough to Lift the Ban
As part of its efforts to regain market access, Apple has committed to investing $1 billion in Indonesia, primarily to build an AirTag production facility on Batam Island. The factory is expected to supply 65% of the global demand for Apple’s tracking devices.
However, government officials were unimpressed, stating that AirTags are accessories, not smartphone components. Agus Gumiwang Kartasasmita, Indonesia’s Minister of Industry, reaffirmed that Apple still does not meet the 40% local content requirement, leaving the ban on iPhone 16 sales in place.
Negotiations Continue, but Indonesia Holds the Upper Hand
Indonesia’s Minister of Economy met with Apple representatives this week, but no agreement was reached. The government has offered a counterproposal, but Apple has yet to respond.
“If Apple wants to sell the iPhone 16 as soon as possible, the decision is in their hands,” said Kartasasmita, making it clear that the company must comply with Indonesia’s manufacturing policies if it wants to return to the market.
This isn’t the first time Indonesia has blocked a major smartphone release over local content issues. In November, the government also banned sales of Google’s Pixel smartphones, citing the same 40% sourcing rule that has kept Apple’s devices off store shelves.
Why Indonesia Matters to Apple
For Apple, losing access to Indonesia is a serious setback. According to market research firm Canalys, the country is the fourth-largest smartphone market in Asia, trailing only China, India, and Japan.
Apple currently holds 12% of Indonesia’s smartphone sales, making it the largest non-Asian brand in the market. However, it faces strong competition from Chinese manufacturers like Oppo and Xiaomi, which control 20% of sales each, and Samsung, which holds 16%.
Without a resolution, Apple risks falling further behind in one of the world’s fastest-growing smartphone markets. Whether the company will comply with Indonesia’s demands or attempt a new negotiation strategy remains to be seen—but for now, the iPhone 16 remains off-limits to Indonesian consumers.