JAKARTA: Indonesia said that it has received an improved investment offer worth US$1 billion from Apple Inc, in the tech giant’s latest bid to lift a ban on the sale of iPhone 16 devices in South-East Asia’s largest economy.
The Indonesian government and Apple have settled upon the number as a "first phase” of outlay, Investment Minister Rosan Roeslani told lawmakers on Tuesday (Dec 3), adding that he expects to get a written commitment letter from the company in a week.
"We want to see fairness,” Roeslani said. "You get benefits here. You invest here and create jobs.”
If confirmed, that would be a ten-fold increase from Apple’s last offer of $100 million. Its initial bid was an even smaller $10 million for a factory making accessories and components in the city of Bandung just outside of the capital Jakarta, Bloomberg News earlier reported. Representatives for Apple didn’t immediately reply to emails seeking comment outside of regular office hours.
Indonesia prohibited the sale of Apple’s flagship iPhone 16 devices, saying it has failed to comply with domestic content requirements for smartphones and tablets. The Cupertino, California-based company had pledged in 2023 to invest 1.7 trillion rupiah ($107 million) for developer academies across Indonesia yet had fallen short by some $10 million.
Roeslani doubled-down on an earlier government demand that Apple should offer Indonesia a better deal than Vietnam, where it’s funnelled about $15 billion for manufacturing facilities. "Their investment must be bigger,” he said.
Industry Minister Agus Gumiwang Kartasasmita, whose office had imposed the iPhone 16 ban, said last month that his top priority was to get Apple to open a local plant, similar to other phone makers like Samsung Electronics Co. and Xiaomi Corp.
If Apple manufactures its devices locally, it would create a ripple effect of investments across related sectors and create more jobs, Roeslani said. "The most important thing is that the global value chain will move to us,” he said.
Indonesia has a long track record of playing hardball with companies to seek more investment and protect its domestic industry. The government has forced ByteDance Ltd.’s TikTok to split its shopping feature from its social media platform a bid to shield its retail sector from cheap Chinese-made goods. It’s also banned the export of raw materials like nickel to push companies to process minerals onshore and develop local battery plants.
The intensified push for investment comes as newly inaugurated President Prabowo Subianto aims to reach 8% economic growth in his five-year term. Gross domestic product expanded at just 4.95% last quarter, its slowest pace in a year, amid weakening factory activity and consumption.
Indonesia is a potential growth market for Apple with a young, increasingly tech-savvy population. The $1-trillion economy has over 350 million active mobile phones, outnumbering the nation’s 270 million population, according to government data. - Bloomberg
