Apple Proposes $100M Investment in Indonesia Amid iPhone 16 Ban

Apple's (AAPL, Financial) iPhone 16 sales declined in Indonesia because Apple failed to conform to local production requirements. As a result, the firm has presented an investment plan of $100 million to set up a manufacturing plant in the country. The offer is ten times larger than an earlier $10 million offer to fix the conflict reached by Bloomberg and other outlets.

Indonesia has set a rule that about 40% of the components of appliances imported into the country should be manufactured locally to promote local industries. Apple failed to meet this requirement, which saw iPhone 16 sales put on hold a few weeks after its launch in September. The proposed plant, expected to be established in West Java, will mainly concentrate on producing accessories and other components to ensure compliance.

This massive shift highlights the company's future route in the still-growing market in Indonesia, a country in Southeast Asia. It has a population of more than 280 million people and is an attractive market for international technology companies. The investment also corresponds to the company's long-term plan to de-emphasize reliance on Malaysia as a production hub as it diversifies throughout Southeast Asia; prior commitments in Vietnam were made earlier this year.

The Ministry of Industry of Indonesia is scheduled to consider Apple's proposal on Thursday, implicating renewed bargaining. The ban also applied to Alphabet's Google (GOOG, Financial), which encountered the same restrictions with Pixel smartphones. These developments highlight that local production policies increasingly shape the emergence of the international technology landscape and market opportunities.