To Sell iPhone 16, Apple Invests IDR 157 Billion in Indonesia. Kemenperin : That's not enough.

Apple is reportedly planning an investment of US$ 10 million (around IDR 157 billion) to obtain approval for selling the iPhone 16 in Indonesia. However, this investment amount falls short of the required commitment that Apple has yet to fulfill with the Indonesian government. The Ministry of Industry has stated that Apple committed to investing IDR 1.71 trillion in Indonesia, but so far, it has only realized IDR 1.48 trillion, leaving a gap of approximately IDR 240 billion.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized that the fate of the iPhone 16 in Indonesia depends on Apple's compliance with the domestic component standard (TKDN). "For the iPhone, we will look at the TKDN level," Airlangga said at his office on Wednesday, November 6, 2024. Airlangga did not comment on reports that Apple is planning to invest in Indonesia, but he added that the government would continue to monitor the situation.

The TKDN regulation referred to by Airlangga is based on the Minister of Communication and Information Technology Regulation (Permenkominfo) No. 27 of 2015, which sets technical standards for telecommunications devices based on LTE technology. This regulation was later updated with Permenkominfo No. 13 of 2021, which stipulates that 4G LTE devices sold in Indonesia must meet two requirements: having a unique IMEI number and meeting the minimum TKDN threshold. The initial TKDN requirement was set at 30%, which was later increased to 35% in the updated regulation.

TKDN calculations are further outlined in the Ministry of Industry Regulation (Permenperin) No. 65/2016, which was later revised with Permenperin No. 29/2017. There are two methods for obtaining a TKDN certificate: first, the normal scheme, which calculates three production aspects: manufacturing (70%), development (20%), and application (10%). This method is used by companies with assembly centers in Indonesia. Second, the innovation scheme, which Apple has used, allows companies to meet the TKDN requirement through investment in innovation centers.

The TKDN value awarded to companies depends on the amount of investment made, as follows:

• IDR 250 billion for a TKDN of 20%
• IDR 400 billion to IDR 550 billion for a TKDN of 25%
• IDR 550 billion to IDR 700 billion for a TKDN of 30%
• IDR 700 billion to IDR 1 trillion for a TKDN of 35%
• Above IDR 1 trillion for a TKDN of 40%

According to data from the Ministry of Industry, the first iPhone model to receive a TKDN certificate was the iPhone 6, which was launched in 2016 and began circulating in Indonesia in 2017. At that time, the iPhone 6 had a TKDN value of 30%, meaning Apple had invested at least IDR 550 billion. The first iPhone model to achieve a TKDN of 35% was the iPhone 8, which was launched in Indonesia in 2017, meaning Apple must have invested a minimum of IDR 700 billion.

Companies using the innovation scheme are required to submit proposals and investment realization reports every three years. This means that Apple should have submitted three TKDN certification extensions in Indonesia by now. The Ministry of Industry confirmed that Apple committed to investing IDR 1.71 trillion in Indonesia, with the final commitment deadline set for 2023.

The reason Apple has not yet realized the planned innovation center, reportedly to be located in Bali, remains unclear. Now, it is rumored that Apple is considering redirecting this investment toward establishing an accessory manufacturing plant. The Deputy Minister of Industry, Faisol Riza, said that the ministry had heard about this and promised that the Minister of Industry, Agus Gumiwang, would soon announce a decision regarding the iPhone 16.

On the other hand, the TKDN regulation specifies that investment to meet the TKDN requirement must be made through the establishment of an innovation center. If Apple wants to meet the TKDN through manufacturing activities, it must ensure that all iPhone 16 products sold in Indonesia meet the three local aspects: manufacturing, development, and application.