In an attempt to better understand the Chinese market, Apple has announced that it will be investing $1 billion in the Chinese ride-hailing service Didi Chuxing.
The company rarely makes large investments and this one will hopefully give it greater insight into the sharing economy and automotive technology. Now that iPhone sales have begun to taper off and are no longer driving growth the way they once did, Apple is looking at ways to expand its presence into other technologies.
Tim Cook, the company's CEO, will be travelling to China later this month and in an interview he explained how Apple investment in Didi Chuxing would eventually pay off: “We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market. Of Course, we believe it will deliver a strong return for our invested capital over time as well.”
Didi Chuxing (formerly Didi Kuaidi) was quite taken aback by Apple's investment which is the single largest investment it has ever received. The company had previously raised several billion dollars from other investors. Didi Chuxing controls 87 per cent of the ride-sharing market in China and each day it completes over 11 million rides.
Apple's investment in Didi Chuxing makes a great deal of sense strategically and after losing BMW and Daimler Chrysler as potential collaborators, the company will certainly need help bringing the 'iCar' to market.