Tim Cook's Vision of Landing a Manufacturing Facility in Indonesia



Indonesia’s manufacturing sector is being considered to set up manufacturing infrastructure by many companies worldwide. Many are betting on its tech savvy population to help support their dream of establishing manufacturing facilities in Indonesia. Apple’s leader is also thinking about the same and made headlines recently. During a rendezvous with the Indonesian President Joko ‘Jokowi’ Widodo, Apple CEO Tim Cook envisioned setting up his company’s manufacturing hub in Indonesia. The tech giant’s leader said that the company will look at the potential of manufacturing in Indonesia, followed by the president’s desire to see domestic manufacturing.

Cook observed that there are endless opportunities to invest in Indonesia and announced the expansion of Apple’s investment in the country a day prior to the meeting with its president. The tech giant is also launching its fourth Apple Developer Academy in Bali to cultivate the country’s digital talent with an emphasis on coding and design to utilize it for its iOS app market growth.

Apple recorded 11.57 percent market share for smartphones in Indonesia in January, indicates Statista’s data. Oppo took the lead with 18 percent market share and Samsung with 17.44 percent market share. Apple sells its phones with the help of regional distributors instead of Apple Store which is directly run in the country. Hence, it plans to have a bigger slice of the market by cultivating talent and growing an iOS app ecosystem in the country.

Jokowi’s Leadership Saw the Pooling of Many Foreign Manufacturers

Under the Indonesian president’s leadership, the government made quite a number of rounds in attracting international manufacturers, particularly who presented deals of transferring skills or advancing its technological capabilities.

Apple’s Strategic Investment

Apple is now one of those companies which has agreed with the government’s 35 percent local content criteria to sell its products in the country, said Agus Gumiwang Kartasasmita, Indonesia’s ministry of industry. The government increased the percentage of domestic parts and components that a company can use in smartphones from 20 percent in 2016 to 35 percent by value in the year 2022. This allows businesses to acquire that percentage of their product’s inputs from domestic businesses to support the growth of the regional industry. Agus believes that this percentage could increase if Apple builds a production facility in the nation. Apple plans to do this by investing in its local developer academies. Therefore, this makes for a meaningful meeting to help bolster Jakarta’s local content regulations for the sale of specific goods in Indonesia.

Following Apple's announcement that it would establish a fourth Apple Developer Academy in the nation, to be situated in Bali, Cook made a trip to Indonesia. As of now, there are academies in Tangerang, which is in the western suburbs of Jakarta, Surabaya, and Batam.

Efforts to Reduce Reliance on China

Meanwhile, Apple has been working towards bringing down its supply chain to reduce leaning on China to source its materials like phones, tablets etc. This relation plays a huge part in helping Apple withdraw its multibillion-dollar income.

This makes sense why Apple is looking at Indonesia for its manufacturing plans. It has already commenced a hunt for alternative production sites due to the slowing Chinese economy. That is, the economic concerns posed by the competition between the US and China, including Beijing’s efforts to push indigenous tech enterprises. Till date, Apple has built factories in Vietnam and India.

Investment in App Developer Community

If not for having any manufacturing facilities there right now, reports claim that Apple has invested about $ 100 million into Indonesia’s app developer community. Not only that, Apple also holds training centers across Indonesia while following regional procurement regulations. Software procurement is said to be determined by a number of aspects like employment, design and intellectual property right to name a few. The latest announcement is believed to garner response to encourage an increase in local procurement percentage.

Analysts view Cook’s visit to how much Apple values the area’s potential as a production base.


The Opportunity Indonesia Presents

Indonesia is home to over 2,000 companies mainly startups, two decacorns and over seven unicorns. The fastest growing industries are observed to be e-commerce, financial technology and on-demand services. Its expanding digital economy is expected to reach $ 124 billion by 2025, having grown by 52 percent in 2021 to a total of 53 billion. The growth of the e-commerce industry, as well as, rising internet penetration also support the growth of the expanding digital consumer. Other factors that support the digital economy include a population of 278 million, a developing middle class, and widespread smartphone use. Its mobile market is believed to have the biggest developmental potential.

Not to mention, the MSMEs (Micro, Small and Medium Enterprises) form the base of Indonesia’s economy. In return, the country supports these MSMEs to use digital platforms to advertise and sell their products. It is observed that at least 8.4 million MSMEs use digital channels to advertise their goods at the moment.

This shows that there are infinite benefits and opportunities for individuals, companies and governments to invest in the nation even if not everyone is tech-savvy. Business models are among the many activities that have become more inventive, efficient, and varied as a result of the digital economy. Additionally, there is potential for the digital economy to grow enough to encourage as many dreams as possible to thrive.

In its commitment to building a thriving developer community, Apple’s fourth academy in Indonesia, located in Bali, is a standing example of this goal. Cook highlighted the marvel of how coding possesses the ability to transform the world. He assured that the company is making efforts to develop talent and innovation in Indonesia to quench the thirst of those in quest to change the world through technology.

App Developer Campuses Welcomes All Including Non-IT Background Candidates

What is unique about these campuses is that they are said to admit applications from all over the world, irrespective of educational background or even having an expertise in coding. This helps promote cross-cultural exchange.

All four developer academies have students hailing from both personal and professional backgrounds. Students from over 90 cities in Indonesia have participated in the cohorts to date, with ages spanning from 18 to 50. Each student contributes fresh perspectives and life experiences to app prototypes and business proposals.

The curriculum of the school also mirrors Apple's approach to challenge-based learning, which encourages students to tackle issues that are personal, local, and global in nature while creating inclusive designs that will have a positive global impact. With an emphasis on equality and accessibility, this academy will be available to students worldwide, irrespective of their educational background or prior coding experience.

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