Indonesia has halted sales of the iPhone 16 as Apple failed to meet local content regulations. In a bid to put the matter to rest, Industry Minister Agus Gumiwang Kartasasmita said a $100 million investment proposal from Apple was insufficient.

Kartasasmita argued that the proposal was not even close to what it has offered in other markets, such as Vietnam, where the company has invested $15 billion, despite a significantly lower sales volume.

Indonesia Finds $100 Million Proposal 'Unfair'

Indonesia Demands More for iPhone 16 Ban Lift

According to Gadgets 360, Indonesia finds Apple's $100 million investment an unfair proposal. Apple sold around 2.5 million units in Indonesia last year, where the company's developer academies only attracted IDR 1.5 trillion (approximately $96 million).

Kartasasmita said that comparing that with Samsung and Xiaomi, who have invested tens of trillions of rupiah here in local manufacturing facilities, this was still a "smaller" proposal.

Indonesia's local content rule requires smartphones and tablets to achieve specific onshore production or investment for them to be sold in the country. The investment shortfall of $10 million from the 2023 pledge by Apple and now the proposed $100 million have brought calls for a more robust plan for 2024-2026.

"We want Apple to return to do business here but we need a fair resolution," Kartasasmita said.

In Indonesia, the government has been asking the Cupertino giant to build a manufacturing plant, in line with President Prabowo Subianto's agenda of supporting local industries.

Competitors Lead the Way in Indonesia

In its hurry to circumvent regulatory requirements, it fails to battle the growing might of Samsung and Xiaomi. Samsung has already invested IDR 8 trillion while Xiaomi has channeled IDR 55 trillion into onshore production to gain market dominance.

Google Pixel phones are also banned in Indonesia for the same reasons. A clear verdict from the government is that local manufacturing should be boosted.

A Young Market with Huge Potential

Despite its relatively modest market share in Indonesia, the country remains a profitable growth opportunity. With over 350 million active mobile phones and a rapidly growing tech-savvy population, the $1 trillion economy could be a booming market in Apple's Southeast Asian expansion.

Kartasasmita expressed optimism about resolving the standoff. The official said that Indonesia expects Apple to resolve the issue as they also have a big interest in doing business here.

Wider Implications for Global Tech Companies

Indonesia's stance is part of the bigger scheme to make local investments from global tech companies.

Beyond Apple, for example, social media platform TikTok was forced recently to separate its shopping feature from the video platform to protect local retailers. The latest ruling reflects a growing trend where nations are exerting their economic interests over multinational corporations.

Now, Apple will likely have to renegotiate investment commitments with the government in line with expectations, an agreement that can be something of a precursor for its future in emerging markets.

In other news, Mobile&Apps reported that the iPhone 16 parts are now available for those who want to DIY their smartphones. The iPhone maker was praised because self-repair is now easier, but still, others criticized it because it's very expensive.