Tim Cook Says Apple Considering Factory In Indonesia

Chief executive Tim Cook continues to seek ways to diversify Apple’s manufacturing base outside of China, during a visit to Indonesia.

Reuters reported that Tim Cook had met with President Joko Widodo and said Apple will look into building a manufacturing facility in Indonesia.

Cook had arrived in Jakarta on Tuesday after visiting Vietnam for two days. During that visit, Apple on its Vietnam website revealed the iPhone giant would “increase spending on suppliers” in that country.

Manufacturing locations

Cook’s trip to Asia comes three weeks after he concluded a visit to China where he met local suppliers.

China remains Apple’s main production centre, and Cook reportedly sought to reassure China of its supply chain importance, amid some manufacturing relocation to other Asian countries.

But Apple has been relocating some of its manufacturing outside of China for a while now.

Back in 2019 Apple began exploring its options to move between 15 to 30 percent of manufacturing out of China, as the trade war between Beijing and the United States deepened.

Countries at the time under consideration included India, Vietnam, Indonesia and Malaysia, as well as Mexico.

Vietnam for example already produces a number of Apple devices, and the country is reportedly now involved in MacBook, iPad and Apple Watch development.

India has delivered a notable increase of Apple device manufacturing, and it is the country where it now manufactures one in seven of its iPhones.

Indonesia move?

Now Tim Cook has reportedly told President Joko Widodo that Apple is considering a manufacturing facility in Indonesia.

Reuters reported that Tim Cook will inaugurate Apple’s fourth developer academy on the island of Bali.

“We talked about the president’s desire to see manufacturing in the country, and it is something that we will look at,” Cook was quoted as telling reporters after meeting the President.

Apple currently has no manufacturing facilities in Indonesia, but since 2018 it has been setting up app developer academies, which including the new academy have a total cost of 1.6 trillion rupiah ($99 million).

Indonesia’s industry minister, Agus Gumiwang Kartasasmita, who also attended the meeting, told reporters that if Apple decided to build manufacturing facility in Indonesia, it would have the capacity to produce for export.

“We will discuss how Apple’s facility in Indonesia could become a global supply chain,” he reportedly said, adding that the government said that even if Apple didn’t built a factory, it could partner with Indonesian companies to obtain components.

Apple has met Indonesia’s 35 percent local content requirement to sell its products by investing in developer academies, Agus said, but the government hoped that number could be pushed higher with a manufacturing facility.

China shift

It is no secret Tim Cook is seeking to manufacture more devices outside of China.

It comes amid a backdrop of worsening geopolitical relations between the United States and China, coupled with Apple’s iPhone sales in China struggling.

Recent  data from Counterpoint Research revealed that iPhone sales in China had plummeted 24 percent over the period, due to stiff competition and abnormally high sales in January 2023.

In an effort to stimulate demand in China, Apple in January 2024 began offering extremely unusual iPhone discounts in China.