Apple Considers Launching iPhone Assembly in Indonesia – Pressure from Local Authorities Works

Apple has had a difficult relationship with Indonesian authorities, who last year banned the import of the iPhone 16 for sale on the local market, reminding the American supplier of the need to comply with localization requirements for such products. After several attempts to find an easier way to get rid of the claims, Apple finally thought about organizing iPhone assembly in Indonesia.

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This was reported by Nikkei Asian Review, citing informed sources among Apple’s partners. One of them already has a representative office in Batam, which may further participate in the development of local infrastructure, and vacancies among engineers have already begun to be filled by local specialists.

Indonesian authorities require smartphone sellers to localize their products by 35%, taking into account not only hardware but also software components. Apple’s proposals to increase the activity of local software developers failed to satisfy the demands of Indonesian authorities in this context, as did the idea to establish the assembly of wireless electronic AirTag tags in this country. Now there is talk of starting to assemble iPhones in Indonesia.

Experts warn that Apple contractors have only one facility in the country, and to organize local assembly of iPhones, it will be necessary to build not only a specialized assembly facility, but also several related ones. This will take at least a year, according to the most optimistic estimates, and it will also be necessary to spend time on developing the engineering infrastructure and certifying the new facility to Apple’s product quality requirements.

The main suppliers of smartphones to the Indonesian market have localized their assembly in one form or another in the country, and Apple remains an exception. Indonesia is the fourth most populous country in the world (up to 276 million people), the share of the economically active population here is quite high, and Apple products occupy only 1% of the local market, so the potential for its development is quite large. This explains the persistence with which Apple is trying to negotiate with the Indonesian authorities to lift the ban on iPhone imports.

Some experts believe that the emergence of infrastructure for the production of complex Apple products in Indonesia will benefit the company, since the influence of India or Vietnam, which are taking over China’s functions in this area, will sooner or later begin to alarm the US authorities, and then manufacturers will need a new “safe haven”, which Indonesia could become.