Tim Hardwick
Apple is close to reaching an agreement with Indonesia to lift a ban on iPhone 16 sales in the country after receiving preliminary approval for a $1 billion investment proposal, Bloomberg reports.
Indonesian President Prabowo Subianto reportedly backed the government's adoption of Apple's investment plan after a briefing over the weekend. The proposal includes setting up manufacturing facilities in the country, with one of Apple's suppliers set to build an AirTag plant on the island of Batam.
The Batam plant is expected to initially employ 1,000 people and eventually account for 20% of global AirTag production. The location was chosen for its free trade zone status, which provides tax breaks and import duty relief.
The additional investment will fund a separate manufacturing facility in Bandung to produce other accessories, as well as expand Apple’s existing developer academies in Indonesia. President Prabowo has tasked his Ministry of Economy with finalizing the deal, but no specific timeline has been given for lifting the ban on iPhone 16 sales.
The ban was imposed in October after Indonesian authorities determined that Apple had failed to meet the country’s requirement for 40% domestic content in smartphones. Apple’s latest offer represents a significant increase from previous offers of $10 million and $100 million, which were rejected by the government.
If approved, the deal would be a success for President Prabowo’s efforts to attract foreign investment, while demonstrating the effectiveness of Indonesia’s strategy of pressuring international companies to develop products locally. The country remains an important market for Apple, with more than half of its 278 million residents under the age of 44.
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