Imagine a country with over 100 million people under the age of 30, and yet, there’s no official Apple store in sight. Welcome to Indonesia, where Apple fans are forced to buy their favourite products from resale platforms.
But that’s not the only issue – Apple’s iPhone 16 model has just been prohibited from sale and marketing in the country, and it’s all because of the company’s failure to meet local investment regulations.
The Local Parts Requirement
According to Indonesia’s industry ministry, Apple’s local unit hasn’t met a crucial requirement: 40% of phones must be made from local parts. This means that Apple needs to invest in Indonesia and source materials from the country to be used in iPhone components. Unfortunately, Apple has fallen short of its investment commitment, having invested only 1.5 trillion rupiah (around $100 million) out of the promised 1.7 trillion.
The Consequences of Non-Compliance
As a result of Apple’s non-compliance, the iPhone 16 devices imported by registered importers cannot be marketed domestically. The good news is that individuals can still bring the new Apple phones into Indonesia as long as they’re not being traded commercially. However, selling these phones in Indonesia would be illegal. The ministry estimates that only around 9,000 units of the new model have entered the country, which has a massive population of around 280 million.
A Familiar Story for Apple
Indonesia has used similar bans in the past to encourage domestic production, with mixed results. Apple previously warned that an import ban on 4,000 goods, including laptops and raw materials, would result in a shortage of laptops in the country. Several companies have scaled back their operations as a result of the ban. On the other hand, the country’s restrictions on the import of mineral ores have accelerated the growth of Indonesia’s own battery sector.
The Smartphone Market in Indonesia
So, who’s dominating the smartphone market in Indonesia? According to Counterpoint Research, it’s China’s Xiaomi, Oppo, and Vivo, as well as South Korea’s Samsung. The lack of Apple’s presence in Indonesia is a significant missed opportunity, considering the country has 350 million active mobile phones – even more than its population.
A Visit from Tim Cook
In April, Apple’s CEO, Tim Cook, visited Indonesia to explore ways to invest in the country and diversify supply chains away from China. He met with the then president, Joko Widodo, and his successor, Prabowo Subianto, to discuss Apple’s plans, including the expansion of its developer academies in the country.
The Future of Apple in Indonesia
Will Apple finally meet Indonesia’s requirements and invest in the country? Only time will tell. For now, iPhone fans in Indonesia will have to wait or resort to buying from resale platforms. One thing’s for sure – Apple’s absence in Indonesia is a significant opportunity lost for the tech giant.