Apple’s latest smartphone, the iPhone 16, is currently unavailable in Indonesia—Southeast Asia’s largest economy—after the Indonesian government blocked the sale of the series last month because it didn’t meet the country’s 40% domestic content requirements for smartphones and tablets.
Now, Apple is looking to invest almost $100 million in a bid to get Jakarta to lift its ban, Bloomberg reports. The $100 million investment would be spread out over two years and is 10 times more than the $10 million Apple reportedly proposed earlier this month. In its earlier proposal, Bloomberg said, citing unnamed sources, Apple would invest in a factory making accessories and components for its gadgets.
Apple did not immediately respond to Coins2Day’s request for comment.
Growing importance
Apple’s reported proposal to increase its investments tenfold to undo the government ban reflects the growing importance of the Indonesian market, which boasts a population of 278 million.
While the case of the iPhone 16, released on Sept. 20, is notable for the government ban, Indonesia usually experiences a one-to-two-month delay in receiving newly launched Apple products, notes Counterpoint Research’s senior analyst Febriman Abdillah. The country does not have an official Apple store and instead relies on third-party partnerships for official reselling.
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But despite the barriers, Abdillah says there’s still enough “Apple fanboys” to ensure consistent demand. Some of these diehard Apple users also travel to neighboring countries like Singapore to purchase the latest iPhone models from official Apple stores, according to Abidllah.
Apple currently has about a 2% share of the overall smartphone market in Indonesia, and the market is currently skewed towards the entry-level segment (below $200), which is dominated by Chinese brands.
But incomes in Indonesia are rising. The country’s GDP per capita according to the World Bank rose to $4,940.50 last year, a 19% rise from 2019.
Rising incomes will likely mean more iPhone sales. Apple sold 2.1 million phones in Indonesia last year according to IDC, a market intelligence firm. IDC is expecting Apple to sell 2.9 million phones in Indonesia this year.
“Indonesia is one of the key markets for Apple in Southeast Asia and one of the fastest growing ones. It’s already overtaken Thailand to be the largest iPhone market in Southeast Asia in the first three quarters of this year,” said Kiranjeet Kaur, associate research director, mobile phones research, at IDC.
Kaur added iPhone shipments have grown by double digits in the last few years and the ban on iPhone 16 sales “threw a spanner in the works”.
But while Apple’s sales figures in Indonesia and the wider Southeast Asia market are still small and represent only a fraction of what Apple sells in more mature economies, analysts have previously told Coins2Day that the region — along with India and Latin America — are what Apple needs to target for future growth.
The reported $100 million investment is just the latest sign of Apple’s Southeast Asia outreach. In April this year, Apple’s CEO Tim Cook embarked on a five-day tour of the region and visited Indonesia, Vietnam, and Singapore.
