Indonesia Wants Larger Apple Investment to Lift iPhone 16 Ban

[Biro]

An iPhone cost is probably higher than the annual income for the majority of the population.

Not quite but it’s clear most Indonesians can’t afford a new iPhone. The average monthly salary is the equivalent of 300-350 U.S.dollars. That’s $3600-4200 a year. Just to make sure we’re comparing apples to apples, in the U.S. that figure is $3000-4000 a month or $36,000-48,000 a year.

 

[clayj]

This is extortion. Apple should tell them to go pound sand.

 

[SamRyouji]

I really want to comment here, as I'd love to clarify some claims about Indonesia being a third world country with hundreds of millions poor people that could only drooling at Apple Authorised Store glass window.
But alas, I will keep being silent and see how far the rabbit hole goes.

 

[klasma]

Indonesia has not changed anything about what they want Apple to do?

There was no deal that was being changed.

 

[philrock]

Apple's fault for saying ok to India's demands. Now other countries saw that.

Perhaps, but Indonesia has 280 million people. That's not a customer base you want to leave without a fight. If Tonga, with a population of about 100K, tried this, it would have much less leverage...

 

[klasma]

That’s why iPadOS was included at the last minute under the “guidelines” of the dma. Because the rules are clear and concise.

IPadOS wasn’t included at the last minute. Assessing services is a continuous process specified by the law, and it’s not surprising that iPadOS has lower priority and thus was assessed later.

 

[anthogag]

Indonesia could make an Apple Car or Apple Scooter.

 

[SamRyouji]

I assure you , they have. Oppo, Samsung, and the likes have even build a factory here to do much of their phone assembly here in Indonesia. Transsion got their way by producing all of the packaging locally sourced here. There are lots of examples only one google search away. The timeline of things are as follows:

1. Apple fell short of their initial promise to really invest in Apple Academy by approximately 6 months.

2. Government got no words on Apple's commitment to round it up, and their deadline was up. So the ban took place.

3. This whole debacle exploded into a major international news. People are divided (but majority of Indonesians supported the government).

4. The government did their math, and found out that Apple invested much bigger in India and Vietnam, even though annual sales there are lower than Indonesia. Then they asked for more from Apple.

5. Apple then threw some proposal while asking whether they'll get a 50 years tax holiday like they got in Vietnam. The government disagree.

6. Then came today: this news about Apple's 100 million USD promise of diverse investments, but the government still wants more than that. They keep rejecting and bargaining to see where Apple's limit really is.


We will see the outcome soon enough out of this debacle. But the domino effects would be huge. I'm sure other countries will follow the same tactics if this "hard bargaining tactic" worked.

Why not close the loopholes and work with the companies instead of punishing?

I can answer that. It is partially due to governments often liking quick fixes to things instead of really fixing things. Why plan for the future when you can pat yourself on the back as you get re-elected?

Increasing domestic manufacturing is one way (but not the only way!) of planning for the future, but how you get there can be important too.

 

[ChrisA]

What stops other countries from doing the same.

"We are the experts of [...]! We demand you to invest in us, even if country X has more expertise in area Y!!!"

They all do. The US is a leader in this and soon will be far ahead. Trump rpomisted to tax all import up to 100%. If this happens the price of nearly everything not made in the US could double. Forcing companies to make stuff in the US (Using robot labor, I assume)

 

[jarman92]

Cool, I guess we're just extorting companies now. The Indonesians are just copying the Europeans but at least they're saying the quiet part out loud.

 

[Victor Mortimer]

Tell me you missed the gist of a Star Wars quote without telling me you missed the gist of a Star Wars quote.

No, we understood the Star Wars quote. But you don't get to quote Star Wars to misrepresent what's going on and then claim "but it was just a Star Wars quote" to get out of criticism for it.

 

[WarmWinterHat]

Cool, I guess we're just extorting companies now. The Indonesians are just copying the Europeans but at least they're saying the quiet part out loud.

Companies have been extorting taxpayers/populace for years by shopping around for 20+ year tax breaks to build and operate in an area, then shut down at year 19 or so. Apple built a plant in Vietnam because of a 50-year tax holiday instead of Indonesia, despite Indonesia being a much bigger market. This is one of the (many) reason they are pissed.

I guess that's cool when corporations rip off economies, though.

 

[neuropsychguy]

I assure you , they have. Oppo, Samsung, and the likes have even build a factory here to do much of their phone assembly here in Indonesia. Transsion got their way by producing all of the packaging locally sourced here. There are lots of examples only one google search away. The timeline of things are as follows:

1. Apple fell short of their initial promise to really invest in Apple Academy by approximately 6 months.

2. Government got no words on Apple's commitment to round it up, and their deadline was up. So the ban took place.

3. This whole debacle exploded into a major international news. People are divided (but majority of Indonesians supported the government).

4. The government did their math, and found out that Apple invested much bigger in India and Vietnam, even though annual sales there are lower than Indonesia. Then they asked for more from Apple.

5. Apple then threw some proposal while asking whether they'll get a 50 years tax holiday like they got in Vietnam. The government disagree.

6. Then came today: this news about Apple's 100 million USD promise of diverse investments, but the government still wants more than that. They keep rejecting and bargaining to see where Apple's limit really is.


We will see the outcome soon enough out of this debacle. But the domino effects would be huge. I'm sure other countries will follow the same tactics if this "hard bargaining tactic" worked.

Thanks for the more comprehensive reply. I appreciate you taking the time.

My point is that the approach isn't something like positive reinforcement; banning a product if it doesn't have X% of whatever made/produced/etc. in the country is a form of negative punishment. Samsung and others have complied with it (they also make very inexpensive phones and don't mind losing money on parts of their business or having slim profit margins), but the process by the Indonesian government was negative from the start because there was always the threat of not allowing a company to sell phones inside the country.

In other words, it's negative because it's: "If you don't do X, I'll take Y away." X = local production/etc., Y = selling phones.

That's treating Apple, Google, and other companies with smartphones like they are criminal organizations even if the goal of the Indonesian government is positive (to them).

 

[neuropsychguy]

No, we understood the Star Wars quote. But you don't get to quote Star Wars to misrepresent what's going on and then claim "but it was just a Star Wars quote" to get out of criticism for it.

The person you are replying to did not quote Star Wars.

 

[philrock]

Lol at people mentioning extortion while Apple is expert at extortion with their mafia-like tactics.
It's amusing seeing them extorted and they deserve eating their own food 100%.
If I was Indonesia I'd ask 1 billion dollars for the ability to operate in Indonesia. After all, Google pays Apple 20 billions annually for the sole purpose of being the default web browser.

This is a good analogy. Google is paying Apple for access to its customers, which is no different from Apple paying for access to a population, AKA customers. All these folks are throwing around the word extortion—is Apple extorting Google? No, it's a mutually beneficial business arrangement.

 

[lotones]

The Indonesian word for extortion is "pemerasan".

 

[WarmWinterHat]

This is a good analogy. Google is paying Apple for access to its customers, which is no different from Apple paying for access to a population, AKA customers. All these folks are throwing around the word extortion—is Apple extorting Google? No, it's a mutually beneficial business arrangement.

It looks like Google is going to be banned, in the US, from paying or making business agreements to be the primary or default option.

 

[iPay]

$100m should buy at least 4 generals. More than enough.

 

[jarman92]

Companies have been extorting taxpayers/populace for years by shopping around for 20+ year tax breaks to build and operate in an area, then shut down at year 19 or so. Apple built a plant in Vietnam because of a 50-year tax holiday instead of Indonesia, despite Indonesia being a much bigger market. This is one of the (many) reason they are pissed.

I guess that's cool when corporations rip off economies, though.

That may be true, but sounds like you don't know what "extortion" means.

 

[WarmWinterHat]

That may be true, but sounds like you don't know what "extortion" means.

Extortion (noun) - the practice of obtaining something, especially money, through force or threats.

We require a tax break or we will take our money and jobs elsewhere..and we will blame you (local government) as we we pass you by. Seems like a threat to me.

 

[jarman92]

Extortion (noun) - the practice of obtaining something, especially money, through force or threats.

We require a tax break or we will take our money and jobs elsewhere..and we will blame you (local government) as we we pass you by. Seems like a threat to me.

Except 99/100, the tax breaks are enthusiastically offered to the companies to entice them to the state/country. So while you may be able to define "extortion," you don't appear able to apply the concept.

 

[jimbobb24]

Companies have been extorting taxpayers/populace for years by shopping around for 20+ year tax breaks to build and operate in an area, then shut down at year 19 or so. Apple built a plant in Vietnam because of a 50-year tax holiday instead of Indonesia, despite Indonesia being a much bigger market. This is one of the (many) reason they are pissed.

I guess that's cool when corporations rip off economies, though.

Following the law is not exhortation...thats a real weird take. Vietnam outcompeted Indonesia so they are responding a different way not to be attractive but to try and exhort.

 

[@Brett]

Give and inch and they will take a mile. A lot of governments looking to milk Apple at the moment to make up for lost revenue.

 

[Victor Mortimer]

Actually, demanding local manufacturing or banning imports is a very reasonable practice. The US should do the same thing to Apple, it's better than tariffs because it doesn't cost the consumer anything, it actually saves them money because they don't purchase the banned products.

I think it's a great idea. "Hey Apple, build at least 50% of the iPhones sold in the US here, or you won't sell a single iPhone here."

 

[Velin]

Dear Apple:

This is extortion. Do not pay. If you do, Apple will be setting a horrendous precedent. Tell Indonesia NO.