The deal is out... Apple promises $1 billion investment

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Creation Date: February 25, 2025 11:56

Indonesia and Apple have reached an agreement to lift a ban on iPhone 16s in the country, people familiar with the matter said, ending a five-month dispute that has forced the U.S. tech giant to increase its promised investment in the country to $1 billion.

The Ministry of Industry, which is responsible for enforcing the ban, will sign a memorandum of understanding with Apple this week, according to the people, who asked not to be identified. A press briefing will also be held, they said, adding that the ministry plans to issue the permit allowing sales of the iPhone 16 as soon as possible.

$1 BILLION PROMISED

The deal concludes a battle that began in October after Indonesia refused to allow Apple’s latest device to be sold because it did not meet domestic manufacturing requirements for smartphones and tablets. Apple promised to invest $1 billion in Indonesia and President Prabowo Subianto instructed his ministers to accept the offer. But the Ministry of Industry unexpectedly upheld the ban last month as it sought better terms.

PRODUCTION MAY NOT OCCUR

In addition to the $1 billion investment, Apple will commit to training locals in research and development on the company’s products, so they can then develop similar software and design their own products, the people said. They added that the move is aimed at appeasing the government, which has been pushing Apple to set up R&D facilities in the country. One of the people said the innovation investment would be made through programs outside of the existing Apple academies. Apple has no immediate plans to start manufacturing iPhones in the country, the people said. While both sides have agreed to lift the ban, Indonesia has backtracked on previous decisions and the deal could still fizzle out. Apple and Indonesia’s Ministry of Industry did not immediately respond to requests for comment.

Officials said the deal was a surprise when it was canceled at the last minute in January, but talks continued to progress positively. Last week, Industry Minister Agus Gumiwang Kartasasmita announced that Apple had paid off a $10 million debt to the government for non-compliance with local rules between 2020 and 2023.

SALES HAVE SLOWED DOWN IN CHINA

For Apple, the deal gives it access to Indonesia ’s massive consumer market at a time when sales in China are slowing. While Apple isn’t among the top five smartphone brands in Indonesia, the country’s 278 million people, more than half of whom are under the age of 44 and tech-savvy, make it too good an opportunity to pass up.