Indonesia says it expects $1 billion from Apple to lift iPhone 16 ban

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Posted:
in iPhone edited December 2024

A minister in Indonesia says the local government expects Apple to shortly offer $1 billion in investment, in order to end the country's ban on iPhone 16 sales.

A diverse group of young adults engaged in a friendly discussion in a casual office lounge with laptops.
Members of the Apple Developer Academies in Indonesia



Apple used to qualify for Indonesia's import regulations because it invested in development opportunities there, but then fell short of its promised commitment. Since the end of October 2024, the Indonesian government has banned all iPhone 16 sales.

According to Reuters, Investment Minister Rosan Roeslani first told Indonesian lawmakers that the country will raise its requirements. The minister then said publicly that he expects to see a $1 billion investment commitment from Apple within a week.

"Whoever benefits from the sales must invest here, create jobs here," said Rosan. "What's important is how the global value chain moves here, because once it does, suppliers follow."

Following the ban, Apple made a token offer of $10 million investment. Indonesia rejected that, and then also rejected Apple's next offer of $100 million

According to the Financial Times, Apple sold around 2.9 million iPhones in Indonesia in 2023.

Nonetheless, Indonesia has been growing in importance to Apple, though as yet it has not moved any manufacturing to the country as it has to India and Vietnam. In April 2024, Tim Cook did promise Indonesia that Apple would consider manufacturing there.

That promise came as Apple opened its fourth Developer Academy in the country.

Apple has not commented on investment minister Rosan Roeslani's announcements.



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Comments

  • Reply 1 of 21
    ajeffreyajeffrey Posts: 6member
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    jas99zeus423ramanpfaffpulseimageswatto_cobra
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  • Reply 2 of 21
    apple4thewinapple4thewin Posts: 422member
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    The real question is if Apple make $1 billion in sales in Indonesia 
    DAalsethjas99killroypulseimageswatto_cobra
     5Likes 0Dislikes 0Informatives
  • Reply 3 of 21
    ihatescreennamesihatescreennames Posts: 2,002member
    I suppose it depends on the time scale. Is Indonesia expecting $1B in investment per year or could it be spread out over 10 years? Apple may make a commitment to invest $1B over time if that makes sense to them.
    jas99killroywatto_cobra
     3Likes 0Dislikes 0Informatives
  • Reply 4 of 21
    kelliekellie Posts: 75member
    apple4thewin said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.

    The real question is if Apple make $1 billion in sales in Indonesia 
    Apple needs to make a billion dollars in profits, not sales, in Indonesia, to justify the expenditure. I’m not sure if they manufacture anything there. 
    apple4thewinjas99killroyzeus423watto_cobra
     4Likes 0Dislikes 1Informative
  • Reply 5 of 21
    avon b7avon b7 Posts: 8,207member
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    It's Apple's call but the rules as dictated by government have to apply.

    The US wants to revive manufacturing too and is using strings
    -attached subsidies and tariffs to try and push companies to manufacture domestically.

    Indonesia wants investment. 

    It's up to them how they go about achieving their goals (as long as they don't fall foul to legal challenges). 

    jahbladeradarthekat
     2Likes 0Dislikes 0Informatives
  • Reply 6 of 21
    jdmcjdmc Posts: 2member
    The article says Apple sold 2.9 million iPhones in Indonesia in 2023. At that rate of sales, a $1-billion investment would represent $345 per iPhone sold. Surely, that is substantially more than Apple's profit on each phone sale, so it's no surprise that Apple would balk at the demand.
    jas99killroywatto_cobra
     3Likes 0Dislikes 0Informatives
  • Reply 7 of 21
    pwrmacpwrmac Posts: 63member
    Well well well.. Indonesia is building a new capital site so they need all the money they can get! Where to get "easy" money.. Yes from Apple. Just get out of the country Tim! Show you have a spine 😄
    zeus423ravnorodompulseimagesAfarstarwatto_cobra
     5Likes 0Dislikes 0Informatives
  • Reply 8 of 21
    bloggerblogbloggerblog Posts: 2,565member
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    It's absolutely not extortion. There are agreements in place and tax breaks. If Apple is not meeting their end of the deal then there are consequences to be expected.
    jahbladeddawson100
     2Likes 0Dislikes 0Informatives
  • Reply 9 of 21
    JamesCudejamescude Posts: 94member
    Hope Tim tells them to pound sand…
    zeus423pulseimageswatto_cobra
     3Likes 0Dislikes 0Informatives
  • Reply 10 of 21
    mikethemartianmikethemartian Posts: 1,604member
    kellie said:
    apple4thewin said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.

    The real question is if Apple make $1 billion in sales in Indonesia 
    Apple needs to make a billion dollars in profits, not sales, in Indonesia, to justify the expenditure. I’m not sure if they manufacture anything there. 
    If it were a straight expense that would be true but not if it was an actual investment in manufacturing. Then the expense is the differential in manufacturing cost of an item in Indonesia vs China.
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 11 of 21
    1348513485 Posts: 394member
    avon b7 said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    It's Apple's call but the rules as dictated by government have to apply.

    The US wants to revive manufacturing too and is using strings
    -attached subsidies and tariffs to try and push companies to manufacture domestically.

    Indonesia wants investment. 

    It's up to them how they go about achieving their goals (as long as they don't fall foul to legal challenges). 

    What do the "rules" actually say? Does every company selling in Indonesia pay a billion dollars up front, or just the companies the government thinks they can squeeze, and it's all a sliding scale based on whims.  If they want long term investment, extortion is probably not the way to go. There are other countries in the world that might be happy for the investment.
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 12 of 21
    radarthekatradarthekat Posts: 3,932moderator
    iPhones have become ubiquitous here in The Philippines.  Without even a single official Apple Store.  Apple still has great potential to grow in this region of the world.  $1 billion invested in Indonesia might pay off handsomely in both increased sales and in continuing to spread manufacturing capabilities beyond China.  
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 13 of 21
    avon b7avon b7 Posts: 8,207member
    13485 said:
    avon b7 said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    It's Apple's call but the rules as dictated by government have to apply.

    The US wants to revive manufacturing too and is using strings
    -attached subsidies and tariffs to try and push companies to manufacture domestically.

    Indonesia wants investment. 

    It's up to them how they go about achieving their goals (as long as they don't fall foul to legal challenges). 

    What do the "rules" actually say? Does every company selling in Indonesia pay a billion dollars up front, or just the companies the government thinks they can squeeze, and it's all a sliding scale based on whims.  If they want long term investment, extortion is probably not the way to go. There are other countries in the world that might be happy for the investment.
    I have no idea but that's why I mentioned potential legal challenges. If Apple could challenge the demands it would do so. 

    As far as I can tell Apple isn't being singled out here and phones aren't the only product category affected. 
     0Likes 0Dislikes 0Informatives
  • Reply 14 of 21
    krawallkrawall Posts: 165member
    This is really silly. Ok, Apple fell short on the initial commitment (by around 13M) and they wanted to pay up 10M so that the ban is lifted and the Government said "not enough, and by the way we want a billion now".

    I mean, it's  Indonesia. I don't have high expectations from that government.

    Of course Apple was also stupid to fall short of the 107 or so million promised investment and then only offering 10M which was a loss to the agreed amount. 

    So what's Apple doing now. Investing 1B and then... oh the next country comes along. Rinse and repeat 190 times.

    It really sets a bad precedent. In one way, these are mega companies that are involved in this, and yeah let them pay a bit, it's all fair and square. Except, it's not, it's extortion and should be called out for it. 

    But OTOH, an investment is an investment, meaning that yes they spend 1B, but they are supposed to get something back for it. So it's not all money down the drain. 

    I just can't shake the feeling it's maybe a backhand of the Indonesian government of what apple was doing all the time? I mean, these companies are picking the best countries to do business with (Looking at you, Ireland) and they have free reign to do that, so perhaps Indonesia got sick of "we'll invest in the future, trust us!" and just called Uno reverse...
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 15 of 21
    Sum.adysum.ady Posts: 1member
    apple4thewin said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    The real question is if Apple make $1 billion in sales in Indonesia 
    Read this : According to the Financial Times, Apple sold around 2.9 million iPhones in Indonesia in 2023. and when you understand it, multiply that value with this article: https://www.counterpointresearch.com/insights/bom-analysis-iphone-15-pro-max-costs-37-7/
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 16 of 21
    ronnronn Posts: 704member
    It looks like a done deal with just the announcement by both some time next week. Apple agreed to meet the manufacturing requirements in the past. Failed to do so, and will have to bite the bullet. As the largest consumer market in Southeast Asia, it's a no-brainer. Consider that Apple has spent $15B in Vietnam, a much smaller market. $1B is chump change from Apple and within Indonesia's Trillion economy.
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 17 of 21
    blitz1blitz1 Posts: 451member
    avon b7 said:
    ajeffrey said:
    This is just blatant extortion by the Indonesian Govt. Why should Apple invest $1 billion in a country just so they can sell their products there. If I were Apple I would tell them where they can put there request and sell older iPhones, it's only the Indonesian public that will suffer.
    It's Apple's call but the rules as dictated by government have to apply.

    The US wants to revive manufacturing too and is using strings
    -attached subsidies and tariffs to try and push companies to manufacture domestically.

    Indonesia wants investment. 

    It's up to them how they go about achieving their goals (as long as they don't fall foul to legal challenges). 

    I understand that my intellectually challenged American friends think this is unfair - since businnes just benefit America first to make it great again- but it’s not that Indonesia is threatening with 100% tariffs, is it? Moreover, there is more than one alternative to Apple whereas you’ll find it hard pressed to find more than 1 Indonesia (and it’s 200+ million potential customers)

    Chill, my friend, it’s only business
     0Likes 0Dislikes 0Informatives
  • Reply 18 of 21
    blitz1blitz1 Posts: 451member
    I understand that my intellectually challenged American friends think this is unfair - since businnes just benefit America first to make it great again- but it’s not that Indonesia is threatening with 100% tariffs, is it? Moreover, there is more than one alternative to Apple whereas you’ll find it hard pressed to find more than 1 Indonesia (and it’s 200+ million potential customers)

    Chill, my friends, it’s only business

     0Likes 0Dislikes 0Informatives
  • Reply 19 of 21
    longfanglongfang Posts: 537member
    pwrmac said:
    Well well well.. Indonesia is building a new capital site so they need all the money they can get! Where to get "easy" money.. Yes from Apple. Just get out of the country Tim! Show you have a spine 😄
    At least it’s a demand for a billion dollar investment, as opposed to the EU version of just fining you a billion for reasons.
    ihatescreennameszeus423bloggerblogwatto_cobra
     4Likes 0Dislikes 0Informatives
  • Reply 20 of 21
    jeffharrisjeffharris Posts: 892member
    I love the smell of EXTORTION in the morning!

    that’s exactly what this is about.
    watto_cobra
     1Like 0Dislikes 0Informatives
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