Apple Faces $1 Billion Demand from Indonesia to Revive iPhone 16 Sales

Indonesia has issued a bold ultimatum to Apple: invest $1 billion to boost local manufacturing or lose the right to sell the iPhone 16 in its market. The ban, enforced for not meeting the nation’s 40% local content requirement for smartphones, puts Apple in a challenging position in one of Southeast Asia’s largest economies.

Indonesia’s demand reflects its broader ambition to strengthen its domestic technology industry. Apple’s earlier offer of $100 million to build a component facility was rejected as insufficient, with officials calling for more job creation and greater alignment with the country’s economic goals. This comes as Apple sold over 2.6 million iPhones in Indonesia last year, generating $1.88 billion in revenue. Losing this market could dent its regional foothold, even as Apple seeks to diversify its production from China to other Asian countries like India and Vietnam.

The $1 billion demand also highlights the risks of local regulations clashing with global supply chain strategies. While compliance could strengthen Apple’s ties with Indonesia and mitigate geopolitical risks, it raises concerns about the financial and operational complexities of building local production facilities. With both sides yet to finalize a deal, the standoff underscores the growing power of emerging markets in shaping the future of tech giants.