Now, the Indonesian government not only maintains the veto, but ups the ante, demanding an investment of 1 billion dollars to reconsider the situation.
The origin of the conflict between Apple and Indonesia
Indonesia, the world’s fourth most populous country, is a key market for Apple, but the Californian company does not currently meet the import requirements established by the government of said country, which require a significant investment to promote technological development and job creation.
Until 2023, Apple complied with regulations through specific programs, such as its developer academies in Indonesia. However, as reported by Investment Minister Rosan Roeslani, Apple fell short of expectations. As a result, the government implemented a total veto on sales of the new iPhone 16.
In an attempt to resolve the conflict, Apple initially offered to invest $10 million, a proposal that was immediately rejected. Later, he increased the offer to 100 million, but he also failed to convince the Indonesian authorities, who now expect a commitment of 1 billion dollars to lift the veto.
Minister Roeslani has been blunt in his position: “Whoever benefits from the sales must invest here and create jobs here.” Indonesia wants to become a relevant player in the technology industry, following the example of countries like India and Vietnam, where Apple has already moved part of its manufacturing. Despite the opening of a fourth Developer Academy in Indonesia in early 2024, the country has yet to attract Apple to establish production facilities on its territory.
Consequences of this conflict in the market
According to the Financial TimesApple sold approximately 2.9 million iPhones in Indonesia in 2023, a significant figure that highlights the importance of the Indonesian market for the company. However, the “punishment” could push local consumers towards competitors such as Samsung and Chinese manufacturers, which would result in notable losses for Tim Cook’s guys.
On the other hand, this confrontation once again reflects the growing pressure that big technology companies face from governments around the world, which seek to obtain local benefits from their global success.
Although the Californian company has not issued official comments on the Indonesian minister’s statements, the challenge ahead is clear. With increasing pressure to diversify its supply chain and become less dependent on China, Indonesia represents a strategic opportunity. However, meeting the government’s demands is a challenge. financial commitment which Apple does not seem willing to accept easily.
The Indonesian government’s position also sends a message to other multinationals: to access their market, they must provide more than products, investing in local development and employment.
This confrontation comes at a crucial time for the company, which is undergoing a change in its operating model by moving parts of its production to new territories. The question is whether Apple will decide to give in to Indonesia’s demands or look for another strategy to maintain its presence in the country.
