Apple Set to Lift Indonesian iPhone 16 Ban After $1 Billion Investment Deal

Apple Inc. is on the verge of resolving its dispute with Indonesia, paving the way for the sale of the iPhone 16, Bloomberg reports.

According to sources familiar with the matter, President Prabowo Subianto has approved a $1 billion investment proposal from the tech giant, effectively lifting the ban imposed last month.

The Indonesian government had prohibited the sale of the iPhone 16, citing Apple’s failure to meet domestic content requirements for smartphones and tablets. However, following a weekend meeting where President Subianto was briefed on Apple’s expanded investment plans, the situation shifted. The President gave the green light for the government to accept Apple’s proposal and encouraged further investment in the future.

Apple’s proposal includes significant investments in Indonesian manufacturing. A key component involves a new AirTags production plant in Batam, a free-trade zone offering tax exemptions. This plant is projected to employ approximately 1,000 workers initially, eventually accounting for 20% of global AirTags production. Further investment will establish a facility in Bandung to produce other Apple accessories. The proposal also includes funding for Apple academies in Indonesia, focused on developing tech skills.

While President Subianto’s approval is a significant step forward, no official timeline has been given for the resumption of iPhone 16 sales. Sources note that the Indonesian government has reversed decisions in the past, leaving room for potential changes. The President’s office, Apple, and the Coordinating Ministry for Economic Affairs have not yet commented publicly.

The deal represents a victory for President Subianto, who aims to attract substantial foreign investment to fund his policy initiatives. It also demonstrates the effectiveness of Indonesia’s strategy to incentivize major foreign companies to increase local manufacturing. Apple, in turn, gains access to Indonesia’s vast consumer market of 278 million, a large portion of whom are tech-savvy young adults.

However, the situation carries a potential risk. The Indonesian government’s assertive approach to securing investments raises concerns among the foreign business community about potential strong-arm tactics and repercussions for companies that fail to meet certain requirements.