Apple Inc. To Expand In Indonesia And Unlock Local iPhone Sales

Apple Inc has committed to invest around $44 million in a research and development center in Indonesia over the next three years, a senior government official said. This enables Apple it to start selling its latest iPhone 7 in the Southeast Asian nation, especially in Indonesia.

Apple Inc. To Expand In Indonesia And Unlock Local iPhone Sales

Apple Inc. is now set to expand into Indonesia, after committing to a $44 million investment to open a new research and development (R&D) center in the region over the next few years, according to Reuters.

Indonesia will implement a rule that requires all smartphones to have at least 30 percent of local its content. The government's requirement will star next year and can be in different ways. It can be in hardware, software, or investments. With Apple's supply chain deeply entrenched in other regions, the iPhone maker went with the latter route and recently earned a "local content certification," according to the report.

According to Apple Insider, same rule also applies in India. Apple received a "local content certification" in November, according to a director-general from the country's industry ministry, Gusti Putu Suryawirawan. The $44 million will be spent over three years, Suryawirawan said, letting the company sell iPhones priced at $448 and above, which includes every current model.

"Apple has committed around $44 million to invest in R&D over three years," said Gusti Putu Suryawirawan, director-general from the country's industry ministry. "Therefore, they can distribute devices priced 6 million rupiah ($448) and above. That means all iPhones can be distributed," Suryawirawan added.

Smartphone Companys Stay Firm

There were roughly 55 million smartphone users in Indonesia in 2015, and quarterly unit sales are typically in the single-digit millions, according to The Motley Fool. However, the smartphone user base to jump to approximately 92 million by 2019, so there's definitely some growth potential for the Indonesian smartphone market, which is already the third-largest in the Asia-Pacific region behind China and India.

Samsung as the market leader with 32% market share. China-based OPPO came in No. 2 with 17% share, followed by ASUS with 8%. The market researcher notes that most of the growth is coming from the $250-to-$300 price segment of the market, although entry-level handsets in the $100-to-$200 range are still the core part of the market. Note that Apple doesn't directly participate in either of those market segments.


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