Apple Allowed to Sell iPhone 7 in Indonesia After $44 Million R&D Investment Pledge

A $44 million investment pledge in an Indonesian R&D center has paved the way for Apple to be able to sell the iPhone 7 in the country, according to one of the country's senior government officials.

A director-general overseeing electronics told Reuters that as a result of the three-year investment commitment, Apple had received a "local content certification" last month which would allow it to sell iPhones throughout Indonesia.

"Apple has committed around $44 million to invest in R&D over three years," I Gusti Putu Suryawirawan said in a text message. "Therefore, they can distribute devices priced 6 million rupiah ($448) and above. That means all iPhones can be distributed."

Starting from 2017, Indonesia will introduce a telecommunications policy which stipulates that all 4G handsets sold in the country must have "local content" of at least 30 percent, whether that be in terms of hardware, software or an investment commitment.

Asked by Reuters to comment on the investment figure, Apple merely pointed to an announcement last year that it had committed to building an iOS App Development Center in the country.

Such an R&D investment apparently fulfills the government's "local content" requirement and will help Apple make significant inroads in the Indonesian market, which is home to 250 million people and a young, tech-savvy demographic that Apple has yet to crack. In 2011, Apple was forced to shut down its online store in Indonesia because of shipping issues, and had to re-apply for permission to launch it again as part of its application to open its first retail store in the country.

According to research firm IDC, Samsung commanded a 26 percent share of Indonesia's smartphone market by sales volume in the second quarter of 2016, trailing Oppo with 19 percent. Both own factories in the country.