Indonesian regulators last week rejected a proposal from Apple that the tech giant had hoped would pave the way for sales of the iPhone 16 in one of Southeast Asia's largest markets.

Indonesia requires 40% of parts used in certain smartphones to be produced domestically. To comply, Apple had pitched a $1 billion investment in a manufacturing facility on Indonesia's Batam island to produce parts for the AirTag tracking device.

However, Indonesian Industry Minister Agus Gumiwang pointed out that since the AirTag is not an iPhone part, the facility would not count towards the locally produced component rule for the iPhone 16, which was rolled out in September 2024, before the local sales ban was first announced.

The regulation, known locally as The Domestic Component Level (TKDN), calls for locally produced components to be integral parts of a device, whether it is a smartphone, a tablet or a computer.

Aryo Meidianto Aji, a Jakarta-based smartphone market analyst, told DW that it seems Apple "does not understand" the TKDN scheme rules.

"Since AirTag is an accessory sold separately from the mobile phone itself, even with significant investment, AirTag will not contribute to the TKDN percentage," he said.

"Ideally, Apple would........

© Deutsche Welle