APPLE has increased its investment offer in Indonesia almost tenfold, according to people familiar with the matter, in the US tech giant’s latest attempt to persuade the government to lift its ban on the sale of the iPhone 16.

The proposal would see Cupertino-based Apple invest nearly $100 million in Southeast Asia’s largest economy over two years, the sources said, asking not to be identified because they are not authorized to express themselves publicly.

Apple’s previous investment plan of nearly $10 million reportedly involved the company investing in an accessory and component manufacturing plant in the city of Bandung, located southeast of Jakarta , Bloomberg News reported earlier.

After Apple submitted its increased offer, Indonesia’s industry ministry, which last month blocked a permit allowing the sale of the iPhone 16, is now demanding that the tech giant change its investment plans to to focus more on the research and development of its smartphones in the country. , people said. The Industry Ministry has not made a final decision on Apple’s latest proposal, they added.

Following Apple’s initial proposal, the ministry called on the company’s top executives to meet with Minister Agus Gumiwang Kartasasmita. But after landing in Jakarta, Apple’s top executives were informed that the minister was unavailable and so they needed to meet with the ministry’s director general.

Apple and the Industry Ministry did not respond to requests for comment.

A NEWSLETTER FOR YOU

Friday, 8:30 a.m.

Asian business

Business outlook focused on the fast-growing economies of Southeast Asia.

Apple’s new investment proposal comes after the Industry Ministry last month blocked sales of the iPhone 16 on the grounds that the US company’s local unit failed to meet the requirement 40% national content for smartphones and tablets.

According to the Indonesian government, Apple has only invested 1.5 trillion rupiah ($95 million) in the country through developer academies, falling far short of its 1.7 trillion rupiah commitment. The Southeast Asian nation also banned the sale of Alphabet’s Google Pixel phones due to a similar lack of investment.

Indonesia’s tough tactics appear to be working, with the iPhone 16 ban becoming an example of the pressure new President Prabowo Subianto’s government is putting on international companies to increase local production while seeking to boost national industries.

Indonesia also resorted to such tactics under the administration of former President Joko Widodo, who last year blocked ByteDance’s TikTok to protect its retail sector from cheap goods made in China. This prompted the hugely popular video app to invest $1.5 billion in a joint venture with Tokopedia, the e-commerce arm of Indonesia’s GoTo Group.

By offering to invest in the country, Apple is seeking unfettered access to Indonesia’s 278 million consumers, more than half of whom are under 44 and tech-savvy.

But such heavy-handed tactics by Indonesia risk deterring other companies from stepping up their presence or establishing a footprint, particularly those seeking to dissociate themselves from China. It could also undermine Prabowo’s goal of attracting foreign investment to grow the economy and finance political spending.

It is unclear which companies Apple’s proposed investment could be aimed at. Apple typically supports assembly or component partners such as Foxconn in various countries, which in turn help produce or supply vital parts for its iPhones and iPads. BLOOMBERG