Apple vs Indonesia: iPhone 16 Ban & more

What Indonesia Wants: A slice of the iPhone pie—literally. They demand that parts of the iPhone or its components be made locally. But here’s the problem: Bureaucratic flip-flopping - even after President Prabowo Subianto gave Apple’s proposal the green light, Industry Minister Agus Gumiwang Kartasasmita insisted on stricter compliance.

While Indonesia is flexing its muscles to boost domestic industries, this approach might backfire. Countries like Vietnam and Malaysia have become investor favorites due to clearer regulations and smoother processes. Indonesia risks scaring off global firms with its regulatory red tape, especially when Southeast Asia is already crowded with competitors vying for tech investments.

But why is Apple still in the game? Simple: Indonesia’s massive market potential. With 278 million people—many young and tech-savvy—it’s a goldmine for future growth. Even if Apple only holds 1% of the smartphone market now (dominated by under-$200 devices), unlocking this market could be a long-term win.

According to IDC, the market overall grew 27.4% YoY, driven by increased demand for budget-friendly smartphones under $200—perfect for Indonesia’s price-sensitive consumers. OPPO and Vivo remain strong, but Samsung’s decline highlights the challenge of competing against cheaper options.

Critics highlight that Indonesia’s strict TKDN rules, inconsistent regulations, and underdeveloped infrastructure deter foreign investments. Neighboring countries like Vietnam and Malaysia are more attractive, offering smoother processes and proximity to key markets.

My take? If Indonesia truly wants to level up its tech industry, it needs to improve infrastructure, upskill its workforce, and clarify its rules. Otherwise, this standoff might send the wrong message to companies looking for alternatives to China.

What do you think—is Indonesia playing it smart or risking too much?