Apple’s highly anticipated iPhone 16 has faced a significant setback in Indonesia due to the tech giant’s failure to meet the country’s local content regulations. The Indonesian government has blocked the sale of the new iPhone, citing Apple’s non-compliance with investment commitments and domestic component level (TKDN) requirements.

Minister of Industry Agus Gumiwang Kartasasmita announced last week that Apple’s iPhone 16 cannot be sold in Indonesia until it extends its TKDN certification. This extension is contingent upon Apple fulfilling its investment commitments in the country.

Apple has only invested 1.48 trillion rupiah (US$95 million) in Indonesia so far, falling short of its total commitment of 1.71 trillion rupiah. The company’s failure to meet these investment targets through research and development facilities has prompted the government’s decision.

While Apple officially launched the iPhone 16 on September 20, it remains unavailable in Indonesia. The Southeast Asian nation has been urging Apple to increase its local content by partnering with domestic firms.

Apple CEO Tim Cook expressed interest in building a manufacturing facility in Indonesia during a visit in April. However, the company currently has no manufacturing facilities in the country.

To sell the iPhone 16 in Indonesia, Apple must meet a 40% TKDN value requirement. Industry Minister Agus emphasized the importance of fairness for investors who have shown strong commitment to investing in Indonesia.

The Indonesian market’s large, tech-savvy population has made it an attractive target for tech investments. Following Cook’s visit, Microsoft CEO Satya Nadella announced a US$1.7 billion investment in cloud and AI infrastructure in the country.

While Apple’s assembly is primarily done in China, the company has been diversifying its supply chain to mitigate trade tensions between the US and China. Vietnam and India have emerged as key beneficiaries, but Indonesia remains hopeful that Apple will follow through on its manufacturing plans.

The unavailability of the iPhone 16 has frustrated Indonesian consumers. Many are eager to purchase the new device but are facing delays due to the government’s regulations. While some consumers are considering purchasing the iPhone from neighboring countries like Singapore or Hong Kong, others are waiting for the device to become available locally.