According to Nikkei Asia, Apple is currently in discussions with its suppliers to potentially assemble iPhones in Indonesia. This move would be significant for the Indonesian government, which has been keen on securing larger investments from the tech company in exchange for access to its market.
According to the report, Apple is considering establishing an iPhone assembly facility in Indonesia to overcome a government-imposed sales ban on its latest models. This production shift would mark Apple's first iPhone manufacturing venture in the Southeast Asian country, where the tech company's supply chain presence is minimal.
In October, the Indonesian government banned sales of Apple's new iPhone 16 due to unmet local content requirements, making these discussions a potential victory in their broader economic strategy.
Meanwhile, Antara and The Investor reported that Rosan Roeslani, Indonesia's Minister of Investment and Downstreaming and head of the Investment Coordinating Board (BKPM), is optimistic about the growth of Apple vendors investing in Indonesia. He mentioned that construction of an Apple vendor factory has commenced, which will supply 65% of global AirTag demands.
The Airtag factory represents an investment of US$1 billion and is expected to create up to 2,000 jobs, with potential expansion to US$10 billion. The facility is scheduled for completion by early 2026.
Although the investment is through a supplier partner, Rosan noted this aligns with Apple's strategy of collaborating with suppliers to establish factories in countries like India, Vietnam, Malaysia, and Indonesia.
Indonesia has implemented rules requiring at least 40% of smartphone components to be locally manufactured. This move aims to ensure that foreign companies make significant investments in transferring technology and creating quality jobs in the country.
Apple is under pressure to comply or risk losing its foothold in a crucial market. In Indonesia, Oppo leads with a 19.14% share, followed by Samsung at 17.95%, and Xiaomi and Vivo at 15.53% and 14.52%. Apple's market share has fallen to 7.3% from 12.8% last October after a ban on the latest iPhone model.
