Indonesia has blocked the sale of Apple's iPhone 16 in the country after the tech giant allegedly failed to comply with certain investment requirements.
The iPhone 16, which was launched in September, would not end up being sold in the Southeast Asian country since the local PT Apple Indonesia was not able to fulfill the 40% domestic content requirement of the country for tablets and smartphones, WSJ reported.
The prohibition only applies to the iPhone 16, and not to older iPhones, which could still be sold in the country.
The recent decision of Indonesia's Ministry of Industry made on October 25 can be considered as a road bump for the mobile giant after a much-celebrated initial successful sales of the iPhone 16 in other Asian markets like China.
Indonesia is regarded as a lucrative market for mobile phone makers. Based on government data cited by Bloomberg, the economy is worth $1 trillion and it has more than 350 million active mobile phones. The number is higher compared to its actual 270 million population. iPhone may not be within the top six mobile phones in the country, but the company recognizes the young and tech-savvy population.
In October, the industry ministry issued a statement on Apple's investment, saying that the company only invested $95 million of 1.5 trillion rupiah in the country, which was below the commitment of 1.7 trillion rupiah, Bloomberg reported.
Instead of establishing a local manufacturing facility, Apple built four development academies. The company's Chief Executive Officer Tim Cook noted in April that it was looking into its viability as well.
Rival mobile manufacturers like Xiaomi and Samsung have complied with the 2017 regulation in the country and have set up their own factories there.
In addition, it also introduced other ways of boosting local economy by sourcing materials locally and hiring domestic workers.
The country has been known to utilize restrictions in trade in order to compel foreign-owned companies to manufacture their products within the country. The process has met certain degree of success, but not as it was expected to be.
Just this year, due to the restrictions that the company imposed on imports, the country saw a shortage of items like car tires and laptops. It also led products to pile up in ports.
So far, approximately 9,000 units of iPhone 16 have already made their way into the country, mostly hand-carried by crew, passengers or delivered by post. The phones were meant for personal use and could not be traded.
