The future of the iPhone 16 in Indonesia hangs in the balance as Apple faces a roadblock tied to its expired Domestic Content Requirement (TKDN) certificate. Without meeting the government’s regulations, the tech giant risks more than just halting the release of its latest model. Even older models like the iPhone 15 and 14, released from 2020 to 2023, might also be barred from the market.
This situation arises because Apple has not yet fulfilled its previous investment commitments, part of the 2020-2023 TKDN agreement. The commitments, due by June 2023, were a prerequisite for maintaining its TKDN certificate. Without compliance, the government cannot renew the certificate.
“Non-compliance with the TKDN regulations can lead to sanctions ranging from requiring additional investment, freezing, or even revoking Apple’s certificate. This would prevent Apple’s products from being sold in Indonesia,” said Febri Hendri Antoni Arif, spokesperson for the Ministry of Industry.
So far, the Ministry has taken a lenient approach, asking Apple to submit a revised investment proposal for the 2024-2026 period. This includes a requirement for new capital investments. However, Febri warned that harsher measures could be imposed if Apple remains uncooperative.
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“If Apple still does not comply, we may consider heavier sanctions,” Febri stated. He added that failing to address these issues might impact the availability of not just new models but older ones, such as the iPhone 14 and 13.
Apple has been criticized for its slow pace in fulfilling its investment promises, despite having operated in Indonesia since 2017. Febri refuted claims suggesting that bureaucratic red tape or a lack of skilled labor is holding Apple back.
“There are no significant barriers preventing Apple from building HKT (cellular phone and tablet) production facilities in Indonesia. Apple has the financial resources and influence to bring their Global Value Chain (GVC) suppliers here. Indonesia’s favorable business climate, skilled labor, and advanced technological ecosystem offer added advantages,” Febri said.
He dismissed assumptions about systemic challenges, labeling them as hypothetical arguments from external parties. “Apple has been doing business here for years under clear regulations. They have never reported issues with bureaucracy or regulatory hurdles,” he emphasized.
Latest Proposal from Apple in Indonesia Raises Eyebrows
In its latest submission, Apple proposed building an AirTag factory in Batam, valued at $1 billion (approximately IDR 16 trillion). The facility is expected to supply 60% of global AirTag demand and create around 2,000 jobs by 2026.
However, the Ministry’s assessment revealed discrepancies in Apple’s claims. “Based on our technical analysis, the real investment value of the AirTag factory is only $200 million (approximately IDR 3.2 trillion). The $1 billion figure includes projections for export value and raw material purchases, which are not considered capital expenditure,” Febri explained.
Capital expenditure, as defined by the government, includes tangible costs like land acquisition, construction, and machinery installation. Operational expenses, such as raw materials, are excluded.
“If Apple’s $1 billion claim were entirely allocated to capital expenditure, it would have a much larger impact. Imagine the number of jobs that could be created with such a significant investment,” Febri added.
The Ministry of Industry remains open to negotiations but expects Apple to deliver on its promises. As discussions continue, the stakes grow higher for Apple to align its commitments with Indonesia’s expectations. Failure to do so could jeopardize not just the iPhone 16 but Apple’s broader presence in one of Southeast Asia’s largest markets.
Will Apple rise to the challenge and secure its foothold in Indonesia? Only time will tell, but the clock is ticking.
