Apple has submitted a plan to invest $100 million in Southeast Asia's largest economy to build a development center and a development academy and start producing mesh components for AirPods Max headphones starting in July 2025, according to Indonesia's industry ministry.
The investment will be in line with the government’s efforts to integrate local industries into global value chains, and marks a major increase in investment from a US$10 million proposal made earlier this month to build an accessories factory in Bandung, West Java.
Apple is planning a major investment to be able to sell products in Indonesia. (Photo: Reuters)
Industry Ministry spokesman Febri Hendri Antoni Arif said the ministry is assessing whether the proposed $100 million investment is fair to Indonesia, not only compared to Apple's investments in other countries but also compared to existing domestic smartphone manufacturers.
The ministry will negotiate carefully because it does not want to give the impression that it is "rolling out the red carpet" just to secure Apple's investment.
It is still illegal to sell the iPhone 16 in Indonesia, and 11,000 new phones were brought into the country this year by hand-carried shipments. To meet the minimum local component requirement, companies can comply by manufacturing their devices or developing firmware locally or investing in local innovation. Apple has built three Academies in Indonesia and has announced plans for a fourth in Bali.
According to the Indonesian Ministry of Industry, iPhone sales in Indonesia led Southeast Asia last year, with 2.61 million units sold and estimated revenue of Rp 30 trillion. Vietnam recorded sales of 1.43 million units.
The Indonesian government aims to strike a balance between integrating local industries into global value chains and maintaining a competitive business environment, but experts warn that regulatory consistency is also important to maintain investor confidence.
The Indonesian government should also focus on improving competitiveness, particularly through skilled labor, clean energy and stronger intellectual property protection.
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