The Indonesian government has banned the sale of the iPhone 16 in the country. According to a report in the South China Morning Post (SCMP), Industry Minister Agus Gumiwang Kartasasmita stressed that Apple will not be allowed to market the iPhone 16 in Indonesia until it complies with all applicable regulations.

Apple must meet its investment commitments in Indonesia or renew its certification in order to sell the iPhone 16. One of the main conditions is to increase the use of local components to 40% in order to obtain the Domestic Component Level (TKDN) certification.

However, this goal is quite challenging as it requires significant investment and cannot be achieved quickly. Without reaching the domestic component level, the company will not receive the required certification.

Apple's Commitment Issues

Apple previously holds TKDN certification, which requires a minimum of 40% local content in its products and services. However, this certification has expired and must be renewed. The company can renew the certification through several options, including local manufacturing plans, application development, or innovation initiatives.

It has also been reported that Apple has yet to fulfill its promised investment commitments to Indonesia. To date, the company has only invested $94.53 million, which is less than its original commitment of $119.6 million. According to a statement by government spokesman Fabri Hendri Antoni Arif, Apple has not fulfilled its investment commitments to establish four research and development facilities in Indonesia.

Impact of iPhone 16 Sales Ban

To date, Apple does not have any manufacturing facilities in Indonesia. However, as part of its commitment to developing the digital ecosystem in Indonesia, the company has invested US$102.9 million to establish the Apple Developer Academy since 2018.

The ban on iPhone 16 sales in Indonesia could pose a significant challenge for Apple CEO Tim Cook, who emphasized the importance of emerging markets like Indonesia in the company's May earnings report, noting that sales in the country had reached record highs.

Restricting the sales of the iPhone 16 in Indonesia is likely to drive consumers to make purchases abroad, particularly in neighboring countries such as Malaysia and Singapore. This could lead to a significant increase in costs for Indonesian consumers.

According to an analysis by Bloomberg Technoz, the total cost of shipping the cheapest iPhone 16 from Singapore to Indonesia - including taxes and IMEI registration fees - could reach around 18 million rupiah (US$1,158). With the iPhone 16 costing around S$1,299 (US$994) in Singapore, buyers in Indonesia would also have to pay an additional fee of around US$155 for the import process.