Apple to invest in Indonesia in bid to end iPhone sales ban in country

The agreement was announced by Industry Minister Agus Gumiwang Kartasasmita in a media briefing in Jakarta on Wednesday, as reported by Bloomberg Technoz. The process to issue a sale permit to Apple will begin, which will allow the company to sell its latest iPhone 16 series models in Indonesia.

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Indonesian government had refused to issue a sale permit to Apple in October. The country’s government had cited Apple’s failure to comply with domestic manufacturing requirements for smartphones and tablets. Apple had then promised to invest $1 billion in Indonesia, which President Prabowo Subianto had asked his ministers to accept.

The ban was upheld by Indonesia’s Industry Ministry in January as it sought better terms to the agreement. Apple agreeing to the country’s terms will help Indonesia in attracting local manufacturing and boosting investments by a foreign company. The government had previously said that Apple had invested only about $95 million in Indonesia.

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The agreement also comes at an opportune time for Prabowo, according to Bloomberg. The optics of a US tech giant yielding to his administration could be used to boost his domestic standing, which has taken a hit following multiple policy U-turns that have generated confusion. On top of that, his plan for sweeping spending cuts that threatened jobs and scholarships triggered days of protests last week.

For Apple, the deal gives it access to Indonesia’s massive consumer market at a time when sales in China have slowed. Though Apple ranks outside the top five smartphone brands in Indonesia, the country’s population of 278 million people — more than half of whom are under the age of 44 and tech-savvy — is too good an opportunity to miss.

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The agreement includes the establishment of a plant on the island of Batam to produce AirTags, a device that allows users to track their luggage, pets or other belongings, Bloomberg Technoz cited the minister as saying. Apple is bringing on board one of its significant suppliers, Luxshare Precision Industry Co., to operate the plant.