Apple reached a deal with the Indonesian government allowing the smartphone giant to meet the country’s local content requirements and start selling its new iPhone 7.

The US vendor committed to investing $44 million in R&D in the country over the next three years and last month received a “local content certificate”, Reuters reported.

Strict content rules mean Apple does not even sell its iPhone 6s in Indonesia. The restrictions limited Apple from selling devices priced at more the IDR6 million ($450). The government deal opens the door for Apple to release the iPhone 7 in 2017 along with the lower-priced 6s.

The government’s push for 30 per cent of content to be sourced locally for LTE smartphones spurred local production, with 88 per cent of 4G models now manufactured in the country, according to Counterpoint Research.

However, the local content regulations slowed growth, with smartphone shipments falling 5 per cent year-on-year in Q2. Given that smartphone penetration is still below 50 per cent, the slowdown is surprising.

Indonesia’s smartphone market is dominated by Samsung and Oppo, which together have more than a 40 per cent market share. The most popular models are in the $100 to $150 range.

With a population of 259 million people, the country has the potential to be one of the largest smartphone markets in the world, which obviously is a key reason Apple worked to reach an agreement with the government.