Apple’s protracted fight with the Indonesian government has finally reached a positive conclusion. Back in October the country’s authorities banned the sale and use of the iPhone 16 series over there on the grounds that Apple failed to meet its previously promised investment threshold in the country. Then, in November, Apple promised to invest $100 million in Indonesia to get rid of the ban, later upping the number to $1 billion, but in January the Indonesian government came out and said it won’t lift the ban unless Apple starts making iPhone components in the country.
Interestingly, Apple still has no plans to make iPhones in Indonesia, and yet a deal has reportedly been reached. This will be officialized through a memorandum of agreement between the Indonesian government and Apple, expected to be signed as early as this week.
Apple will invest $1 billion in the country, including in a manufacturing plant for AirTags which will eventually account for about 20% of global AirTag production, and a separate factory for other types of accessories. Apple will also train local talent in research and development, and will invest in academies to equip Indonesian students with skills like coding.
This is a lesson in how playing hardball sometimes works out, and it will be interesting to see if other nations follow suit. Of course, Indonesia being a big market of 278 million people played a crucial role in first getting Apple to the negotiating table, and then making concessions, so this strategy likely can’t be successful for much smaller countries.
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