Apple Inc said on Thursday it has invested 1 billion US dollars in Didi Chuxing, a Chinese ride-sharing company and a rival of Uber in China, a move that Apple Chief Executive Tim Cook said would help the company better understand the critical Chinese market.
Noting that Cook, who will travel to the country this month, has already stated in an interview that he saw collaboration opportunities between Apple and Didi Chuxing, and can see it growing very well in the market. This huge and uncommon investment shows that Apple is looking forward to revive sales in China, since lately it has come under greater pressure from regulators, and according to Apple they are making this investment for a many strategic reasons.
Tim Cook commented on this move assuring that they believe it will deliver a strong return for their invested capital over time as well. Previously known as Didi Kuaidi, Didi Chuxing said this was the one most giant investment it has ever received.
Though Didi Chuxing is valued at upwards of $20 billion, according to a person familiar with its ongoing funding round, the company has been losing billions in a costly battle with Uber for market share in China. While investors eagerly watch by the time Apple has hired many automotive experts, analysts say the deal offers a glimpse of how Apple may diversify its business as sales of the iPhone level off.
In addition to the aforementioned, Apple has emphasized its burgeoning revenue from services such as Apple Music and mobile payment Apple Pay, a strategy that the ride-sharing investment appears to reinforce, said analyst Patrick Moorhead of Moor Insights & Strategy. “After all the hints about the service business and what they would like to do in the future, it’s all starting to fit together,” said the latter.