Apple’s $1 billion offer not enough to lift Indonesia’s ban

iPhone 16 smartphones. Photographer: Chris Ratcliffe/Bloomberg

Indonesia has kept a ban on the sale of Apple Inc.’s iPhone 16s, saying the company’s $1 billion plan that includes building a local AirTag factory is insufficient to meet local investment requirements.

Domestic content rules require Apple to produce part of their smartphones or components onshore, while the AirTag is only an accessory, Minister Agus Gumiwang Kartasasmita said in a briefing on Wednesday.

“As of this afternoon, the government does not have a basis for issuing the local content certificates” that Apple needs to sell its flagship device in Indonesia, he said. “Apple needs to negotiate with us so that we can issue a certificate.”

According to Kartasasmita, Apple could be sanctioned for its continued non-compliance with local investment rules, though that would be the government’s last resort. “We will look for other ways or options,” he said, adding that the government has already sent a counterproposal to Apple.

Apple had proposed to build a factory by early 2026 and commence production of AirTags, a device that allows users to track their luggage, pets, or other belongings, according to Investment Minister Rosan Roeslani. Company executives are in Jakarta to negotiate with the government on the investment proposal, in a bid to lift the iPhone 16 ban meted out in October.