Indonesia and Apple have agreed on terms to lift the country's ban on iPhone 16s and could sign a deal as early as this week, Bloomberg News reported on Tuesday, citing people familiar with the matter.

Indonesia banned the iPhone 16 in October after Apple failed to meet requirements that smartphones sold domestically should comprise at least 35% locally-made parts.

Since then, Indonesia's investment minister has said Apple plans to invest $1 billion in a manufacturing plant that produces components for smartphones and other products.

Besides this investment, Apple will commit to training locals in research and development on its products and this will be done through programs other than existing Apple academies, the report said.

Indonesia's Industry Ministry, which is responsible for enforcing the ban, will sign a memorandum of understanding with Apple as early as this week , according to people familiar with the matter , and plans to hold a press conference as soon as possible to issue a license allowing the iPhone 16 to be sold.

The deal is a victory for Indonesia, whose hardball tactics have successfully persuaded a large multinational company to increase investment in Indonesia and promote local manufacturing, rather than just using Indonesia as a sales market. Previously, the Indonesian government said Apple's investment in Indonesia was only $95 million.

Apple plans to set up a factory in Batam, Indonesia to produce AirTag, a device that helps users track luggage, pets or other items. According to Bloomberg, Apple will introduce its important supplier Luxshare Precision Industry to operate the factory, which will account for 20% of the global AirTag production in the future.

In addition, Apple's investment plans in Indonesia also include setting up a factory in Bandung, about three hours' drive southeast of Jakarta, to produce other types of accessories, as well as funding Apple Academy to provide students with technical skills training such as programming.

In other news, Apple analyst Ming-Chi Kuo posted a brief research note stating: In 2026, Apple's new Houston, USA factory will begin producing AI servers powered by the high-end M5 processor.