What just happened? The Indonesian government has banned the sale of the latest iPhones and Apple Watches after Apple failed to meet its investment commitments in the country. Banned products include the new iPhone 16 models and Watch Series 10, which were unveiled at Apple’s “Glowtime” event on September 9.

According to Bloomberg, the ban extends to all units already sold, making it illegal to operate any iPhone 16 model in the country. Industry Minister Agus Gumiwang Kartasasmita has warned citizens against purchasing banned devices abroad and urged them to report anyone using a banned iPhone or Apple Watch.

The ban follows allegations by the Indonesian government that Apple has not fully complied with its investment commitments in the country. To date, Apple has reportedly invested 1.48 trillion rupiah ($94 million) in Indonesia, which is 230 billion rupiah ($14 million) less than its pledge of 1.71 trillion rupiah ($108 million). ).

The minister also cited Apple’s failure to comply with component localization requirements as an additional reason for the ban. Apple reportedly did not get an extension of TKDN certification on the iPhone 16 because it lacked the 40% locally manufactured components required for legal sale in Indonesia.

The ban is unlikely to have a significant impact on Apple’s bottom line, as Indonesia is not one of its largest markets. Although Apple is not among the top five smartphone vendors in the country, it holds a strong lead over Samsung in the premium phone segment. According to IDC, Oppo is the top smartphone vendor in Indonesia, followed by Samsung, Transsion, Vivo and Xiaomi.

Earlier this year, Tim Cook visited Jakarta and met with President Joko Widodo to discuss the possibility of establishing a manufacturing plant in Indonesia. This is part of Apple’s broader strategy to diversify its supply chains away from China, where most of its smartphones and tablets are currently assembled.

Apple has already shifted some of its production to Vietnam and India amid escalating tensions between Beijing and Washington and is working with its manufacturing partners to expand production capacity in other low-cost Asian countries.