While Apple faces a ban from Indonesia, Chinese smartphone maker Honor is making inroads

BEIJING — Huawei Honor announced on Tuesday that it plans to start selling smartphones in Indonesia by the end of March, becoming the latest Chinese company to enter a market that has banned the iPhone 16 from Apple over domestic production requirements.

Indonesia requires that smartphones sold in the country 40% of their components must be domestic. This rule has prevented Apple from selling its newest phone in the market where it is reportedly located negotiating a $1 billion investment.

Honor has an office in Indonesia and works with one local manufacturing partner, Justin Li, the company’s Chinese president for South Pacific operations, told reporters last week. He said the foldable phone would be one of Honor’s first products to be sold locally, with 10 names in the mid-range and high-end segment.

By the end of the year, the company plans to offer about 30 products from phones to tablets in Indonesia. The Southeast Asian country is home to the world the fourth most populous countryright after the US.

“Despite 80% of the market being dominated by sub-$200 devices, Indonesia, as Southeast Asia’s largest and fastest-growing economy, has huge potential for long-term growth,” Canalys analyst Chiu Le said in an email. Xuan.

“Indonesia is emerging as a key market in Southeast Asia, thanks to rapid economic growth and a growing middle class,” Chiu said, noting that the country accounts for 35% of smartphone shipments in the region and could serve as a strategic regional hub.

As of November, Oppo, Xiaomi and Transsion – all from China – were the top three in Indonesia’s smartphone shipments, according to Canalys. Shenzhen-based Oppo held in November the global launch of its flagship phone, the Find X8 in Indonesia, where the company also has a factory.

Samsung ranked fourth in Indonesia with a 16% share, tied with Vivo, another Chinese brand, Canalys data showed.

Except for China and Japan, just under 8% of Apple’s sales originate from the Asia-Pacific region.

Lee argued that the decision to enter Indonesia was independent of Apple’s presence in the country and was confident in Honor’s ability to compete. He said Honor had been eyeing the Indonesian market for years before doubling down on expansion efforts in the past six months.

While he declined to share the current breakdown of Indonesian to Chinese staff, Li said Honor is still hiring in the country and aims to have a predominantly local staff in the future.

Honor plans to open at least 10 of its own stores in Indonesia this year, in addition to selling through local retailers, Lee said.

Outside of China, Honor is mainly sold in Europe and parts of Southeast Asia. Its phones are not sold directly in the US. The company claimed that more than half of its sales in December came from outside China for the first time.

Honor that is plans to go publicwas spun off from Chinese telecom giant Huawei in November 2020 after the parent company fell under US sanctions. Huawei said it doesn’t have any shares in honor or participate in business decisions.