Indonesia has decided to block the sale of Google Pixel smartphones on its territory. It sounds almost like a plot from a movie about David standing up to Goliath. In the role of David is the Indonesian government, in the role of Goliath is Google. The reason? Google did not fulfill one of the key conditions for entering the local market: 40% of the device's components must be locally produced.
The fact is that Indonesia, like many other countries, has begun to insist on the use of local components for the production of technology. The essence is that if global corporations want to sell their devices in the country, they must contribute to the local economy. It all makes sense: the government aims to develop its own manufacturing capabilities and reduce dependence on imports.
The 40% rule and why Google found itself out of the game
The 40% rule is not just a bureaucratic formality. It is the economy. When a smartphone is produced using local components, it stimulates the development of local factories, companies, and jobs. But for a global player like Google, such a move may not be profitable: replacement and logistics can increase costs, which would hit the company's profitability. Simply put, such 'homework' is not always feasible for the giants of the tech world.
Google tried to evade the local rule, but Indonesia did not give in to the well-known tricks where companies report 'phantom' components, and in reality, it is just a checkbox for the sake of a checkbox. Local authorities made it clear: without local content, there will be no sales.
What will this lead to
For Google, losing the Indonesian market may not be a global tragedy, but it is definitely a signal for other countries considering similar measures. If Indonesia was able to corner Google, why shouldn't others try? This is no longer just economics; it is the geopolitics of technology.
Local market
Indonesian buyers can currently forget about the new Pixel. But this does not mean that the shortage will remain. Local manufacturers, such as Advan and Evercoss, are actively filling the market by offering devices with local components. Local startups may not have the advanced technologies of Google, but they have the main advantage — they fully comply with the country's requirements. So, friends, it is not out of the question that in a couple of years, Indonesian smartphones could compete in the global market.
The Indonesian government has made it clear that they are not willing to sacrifice the local economy for big brands. If global players want to enter this market, they will have to adapt. Google, be prepared, in the world of technology and economics, not everything can be bought.
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