Indonesia sets new precedent with $1 billion win in Apple negotiations

For five months, Indonesians were cut off from Apple’s iPhone 16 models amid a standoff between the tech giant and a newly emboldened Indonesian government. The conflict arose when the government banned the device’s sale, citing Apple’s failure to comply with local manufacturing mandates. The strategy seems to have worked: Apple eventually upped its investment in Indonesia to $1 billion, a massive leap from its original $10 million proposal.
Faris Mokhtar for Bloomberg News:
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As part of the investment, Apple will set up a local AirTag factory and another plant producing components for AirPods. It will also invest in a software research and development centre.
The iPhone 16 family will soon be licensed for sale in the country and the authorities can claim a victory in pushing a global tech behemoth to share the benefits of operating in its consumer market of of 278 million people.
Indonesia had been the last major emerging market where Apple didn’t already have local production. India, Vietnam, Mexico and Brazil all have large populations and manufacture Apple goods locally.
With this outcome, Indonesia could be setting a template for other emerging economies. Not all can leverage as large a population, to be sure, but all countries are interested in moving up the value chain in manufacturing — they want their workforces to learn how to design, not just assemble, advanced electronics. Whether it’s the potential for sales growth or, as in Indonesia’s case, natural resources, we now have more evidence that governments can negotiate better terms with multinationals.

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MacDailyNews Take: As we wrote back in December, “This is how the game is played. If Apple wants access to a lucrative market, the lucrative market can (and should) demand something in return.”
Good to see this rectified as Indonesia is a huge market with a population of over 280 million people as of 2024. – MacDailyNews, February 25, 2025

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