Apple remains barred from selling its iPhone 16 lineup in Indonesia, despite its agreement to build a local production facility there. The country’s industry minister said on Wednesday that the company has not met domestic content rules, according to a report from Reuters.
Indonesia’s minister of industry, Agus Gumiwang Kartasasmita, reportedly met with Apple’s VP of global government affairs, Nick Ammann, on January 7 to discuss Apple’s investment proposal. However, Agus later told reporters “If it is $1 billion, then that is not enough.”
iPhone 16 sales in Indonesia were blocked in October, after the government determined that Apple had not met the country’s 40% domestic content requirement for smartphones. The government also claims Apple fell short of a previous promise to invest 1.7 trillion rupiah through developer academies, instead investing only 1.5 trillion rupiah.
Indonesia represents a significant piece of Apple’s smartphone market, as the country has a population of 280 million, who own around 354 million active mobile phones.
Apple raised its proposal from a initial offer of $10 million to $100 million in November, which included plans for opening research and development facilities and developer academies in Bali and Jakarta over a two-year period. Apple also said it plans to manufacture AirPods Max ear cup mesh components in Bandung starting July 2025.
Apple has since offered a $1 billion investment in the country that includes building an AirTag factory.
Agus confirmed that while Apple had agreed to build a facility producing AirTags on Indonesia’s Batam island, near Singapore, but that it still would not count as a locally-made iPhone part.
“There is no basis for the ministry to issue a local content certification as a way for Apple to have the permission to sell iPhone 16 because (the facility) has no direct relations,” he said, adding the ministry would only count phone components.
Indonesia’s investment minister on Tuesday said the factory would start operations next year.