Apple Explores iPhone Production in Indonesia Following Ban [Report]

Apple's supply chain may soon extend to Indonesia as suppliers discuss setting up iPhone final assembly there, according to a new report from Nikkei Asia. The development comes amid ongoing negotiations with the Indonesian government to lift a sales ban on Apple's latest iPhone models.

Multiple sources have told the site that Apple has been in talks with its suppliers about the feasibility of establishing an iPhone assembly line in Indonesia. One source explained, "An iPhone assembler has set up a subsidiary in Batam particularly for Apple and has started hiring engineers as part of the preparation."

If finalized, this plan would represent a significant shift for Apple. Indonesia currently lacks a robust supply chain ecosystem for the company's sophisticated iPhone production process—a stark contrast to established hubs like China and India.


The Indonesian government imposed a ban on the iPhone 16 series last year, after Apple failed to meet local content requirements—a mandate that stipulates that 35% of a smartphone's components and software must be produced domestically. This led to months-long discussions between Apple and Indonesian authorities. Apple initially pledged to invest in local education academies. However, the government deemed the measure insufficient. Subsequent proposals, including plans to manufacture AirTag accessories in Indonesia, were also rejected. A final decision on whether to approve local iPhone assembly now hinges on further negotiations between Apple and Indonesian officials.

Establishing an iPhone assembly facility in Indonesia would be a complex, multi-step process. One knowledgeable executive noted that, should the decision be finalized, building a plant in Batam could take at least a year. The executive added:

"Apart from building the plant, it needs some four to six months at least to set up power distribution for the manufacturing process, let alone the verification process by Apple after the production line is ready. It would mean a big commitment for Apple to ask suppliers to go to Indonesia."

This timeline reflects the challenges inherent in developing a local supply chain from the ground up—especially in a country where, as another executive put it, "They have absolutely nothing there in terms of the supply chain ecosystem."


Progress in Indonesia will largely depend on both Apple's support to its suppliers and backing from local government initiatives aimed at boosting the nation's tech manufacturing industry.

Indonesia, the world's fourth most populous nation, represents a key emerging market for smartphones despite Apple's modest 1% market share. The majority of devices sold locally are entry-level models, with an average price of about $195. Meanwhile, established players such as Samsung, Oppo, Xiaomi, Vivo, and even Chinese manufacturer Transsion—which saw shipments surge over 61% in 2024—have already built significant local production capabilities.

Apple's move to consider Indonesian production comes as the global smartphone market slows and geopolitical tensions, such as U.S.-China relations, continue to challenge supply chain stability.

More details in the full report linked below...

Read More