STRONGARM TACTIC COULD BACKFIRE
Indonesia’s strong-arming appears to have reaped some victories. Yet it has also exposed what a costly headache it is for foreign companies to navigate the regulatory red tape required to operate within its borders. This could backfire, as competition for tech investment in the region grows, and competitors such as Vietnam and Malaysia position themselves as more attractive options.
Apple accounted for just 1 per cent of the Indonesian smartphone market as of the third quarter of last year, according to data from research firm Canalys. Some 80 per cent of the market is dominated by devices that cost under US$200, a much lower price point than Apple’s marquee lineup.
The company may have the resources to play the long game and navigate the many hoops the government is forcing it to jump through. But others keeping tabs on the drama may be discouraged by the many hurdles, even if their lower-cost options are a better fit for the country’s current market.
Still, Apple is wise to stick it out for the chance to unlock longer-term growth in the world’s fourth most-populous country that has more active cell phones than people. Shipments to the archipelago, with its young and tech-savvy population, are forecast to grow at a significantly higher clip than the global rate.
And as this saga drags on, Chinese premium brand Honor, a spinoff of Huawei, announced it was entering Indonesia. The cheekily timed foray into the market is not related to the iPhone 16 ban, an Honor executive has said.
https://www.channelnewsasia.com/commentary/indonesia-ban-apple-iphone16-airtag-factory-investment-4849816
