Apple Strikes $1 Billion Deal to End iPhone 16 Sales Ban in Indonesia

Apple has reached an agreement with Indonesia to resolve a five-month standoff that had blocked iPhone 16 sales in the country. The deal, which includes a $1 billion investment commitment from Apple, aims to meet Indonesia’s local manufacturing requirements while strengthening Apple’s presence in the region.

What Led to the Dispute?

The conflict began last October when Indonesia denied Apple a sales permit for the iPhone 16, arguing that the company failed to comply with domestic manufacturing regulations. Indonesia requires tech companies selling smartphones and tablets in the country to contribute to local production, and Apple’s previous $95 million investment wasn’t enough to satisfy these requirements.

Initially, Apple proposed a $10 million investment to lift the ban, which was quickly rejected. The company then increased its offer to $100 million, but Indonesia still held firm. Finally, after Apple committed $1 billion, President Prabowo Subianto instructed his administration to approve the deal—though negotiations continued for several weeks before a final agreement was reached.

What’s Included in Apple’s Investment?

Under the new deal, Apple will:

• Invest $1 billion in Indonesia to meet local requirements.
• Expand research and development (R&D) training for Indonesians, helping them develop skills in software and product design.
• Establish a plant in Batam to produce AirTags, expected to handle 20% of global production through Luxshare Precision Industry Co.
• Build another facility in Bandung for additional accessories.
• Enhance Apple’s existing academies, which teach skills like coding and software development.

While Apple is expanding its footprint in Indonesia, the company has no immediate plans to manufacture iPhones there, according to sources familiar with the matter.

A Win for Both Sides

For Indonesia, this deal is a major success. The government secured a much larger investment from one of the world’s biggest tech companies, reinforcing its commitment to boosting local industry and technology development.

For Apple, the agreement unlocks access to Indonesia’s 278 million-strong market. With more than half the population under 44 and highly tech-savvy, the region represents a key growth opportunity—especially as Apple faces slowing sales in China.

Additionally, Apple settled a $10 million fine for noncompliance with local rules from 2020 to 2023, further clearing the way for smoother operations in the country.

What’s Next?

While the agreement is a step forward, Indonesia has reversed similar deals in the past, meaning there is still a chance the terms could shift again. However, with both sides eager to move forward, it’s expected that the Ministry of Industry will issue a sales permit for the iPhone 16 soon, allowing Apple to resume business in the country.

This deal also boosts President Prabowo’s administration, which has faced domestic criticism over economic policies. Successfully securing a $1 billion investment from Apple helps strengthen Indonesia’s position as a growing player in the global tech industry.

With this agreement in place, Apple is poised to expand its influence in Indonesia while giving the country’s tech industry a much-needed boost.