Apple is known for playing hardball when it comes to negotiations, but it seems the Indonesian government is capable of giving as good as it gets.
The country banned the sale of the iPhone 16, saying the Cupertino company hadn’t invested enough in the local economy. Apple responded by offering to increase its manufacturing spend from $10M to $100M, but Indonesia now says it expects a billion dollars – and it wants the investment agreed within a week …
The iPhone 16 sales ban
Apple initially invested in Indonesia by putting $109M into a developer academy there, with a further $10M manufacturing spend. The government said that Apple had fallen short on the first promise, spending only $95M. As a result, it banned the sale and use of iPhone 16 models.
Apple’s $14 million ($230 billion rupiah) shortcoming has prevented Indonesia’s Ministry of Industry from issuing the proper IMEI (international mobile equipment identity) certifications, which is required for the devices to be sold in the country.
Apple upped manufacturing spend to $100M
Apple responded by offering a ten-fold increase in its manufacturing spend in the country, from $10M to $100M.
It’s as yet unclear what form this investment might take. It could involve asking Foxconn to establish iPhone and iPad assembly plants in the country, or arranging for other supply chain partners to manufacture components for Apple devices [though] he government has previously indicated that the latter approach would be acceptable.
The government responded by saying it expected more, though it didn’t name a figure at that time.
But now Indonesia wants $1B
However, Reuters today reports that the country expects another ten-fold increase, to a cool billion dollars.
Indonesia is expecting to get a $1 billion investment commitment from tech firm Apple in a week, its investment minister said on Tuesday, after the government banned iPhone 16 sales for failing to meet local content rules […]
“Whoever benefits from the sales must invest here, create jobs here. What’s important is how the global value chain moves here, because once it does, suppliers follow,” Rosan said, adding the investment commitment is part of a first phase.
Indonesia is in a relatively strong position, with a total population of around 280M people and growing prosperity, making it an important growth market for Apple. There’s also no timeframe mentioned in the report, so Apple could likely satisfy the government with a commitment spanning a decade or two.
Apple had not commented at the time of writing.
Photo by Ivy Aralia Nizar on Unsplash
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