Apple banned from selling iPhone 16 in Indonesia

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Indonesia has banned the sale of the iPhone 16 in the country, citing Apple’s failure to meet government stipulations for local investment.

Apple’s latest smartphone has not passed the south-east Asian country’s requirements for 40 per cent local content in handsets and tablets, the Ministry of Industry said.

“iPhone 16s imported by registered importers cannot be sold in the country since PT Apple Indonesia has yet to fulfil its investment commitment to obtain ‘local content level’ certification on innovation,” the ministry said in a statement issued on Friday, referring to Apple’s local unit.

Indonesia has long used trade regulations to attract foreign investments and onshore manufacturing, and protect its domestic industries. However, some have criticised the rules as protectionist and the local content requirement — which is different across industries and calls for a certain percentage of goods to be sourced locally — has deterred some investors.

The world’s fourth most populous country is potentially a huge market for Apple products. The number of active mobile phones in Indonesia totals 354mn — exceeding the population of about 280mn, the industry ministry said.

The ministry added that about 9,000 units of the iPhone 16 series had entered Indonesia through passenger luggage since it went on sale last month. “These phones entered legally, but will be illegal if traded in Indonesia,” it said.

Earlier this month, the ministry said Apple had committed to invest Rp1.71tn ($108mn), but it has only invested Rp1.48tn so far. The then industry minister also said Apple’s investment in the country was relatively small compared with the sales of Apple products in Indonesia.

Apple did not immediately respond to a request for comment.

The ban on sales comes just days after former general Prabowo Subianto took over as Indonesia’s president from Joko Widodo. He has promised investment-friendly policies.

Under Widodo’s administration, Indonesia enforced a ban on exports of nickel ore in a bid to boost the value of its exports — a move that forced companies to invest in smelters and processing facilities onshore. The World Trade Organization said the ban was not in accordance with global trade rules. Prabowo has said he would look to implement the so-called downstreaming programme across other commodities.

Indonesia has previously called for more investments from Apple, which has four developer academies in the country but no manufacturing facility. Earlier this year, ministers in the Widodo administration asked Apple to set up a factory or research and development centre, saying the developer academies were not enough.

In April, Widodo asked Apple to set up manufacturing in a meeting with chief executive Tim Cook in Jakarta. However, Cook did not make any commitments. “We talked about the president’s desire to see manufacturing in the country, and it’s something that we will look at,” Cook said after the meeting.