Apple is betting on China in a big way. On Thursday, the Cupertino-based iEmpire announced that it had invested $1 billion in Didi Chuxing, a Chinese ride-hailing service and Uber’s main competition in the country. According to Apple CEO Tim Cook, this financial move would help Apple better understand the burgeoning Chinese market and the opportunities it presents.
The investment is one of Apple’s largest ever, and comes just three weeks after Cook met with executives at Didi to discuss potential collaborations. While Apple has historically enjoyed great success in China thanks to the popularity of the iPhone, disappointing first quarter earnings as well as pressure from Chinese regulators is clearly prompting the company to think a bit outside of the box when it comes to its overseas strategy.
“We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” said Cook. “Of course, we believe it will deliver a strong return for our invested capital over time as well.”
Didi Chuxing already completes more than 11 million rides on a daily basis and has cornered 87 percent of the car-hailing market in China. Although the company has a staggering valuation of more than $20 billion, Reuters reports that “the company has been losing billions in a costly battle with Uber for market share in China.”
Still, the possibilities of an Apple and Didi collaboration seem boundless, with some experts hypothesizing that this could be Apple’s way to get into the autonomous car game. Didi President Jean Liu noted that the companies “are very confident we will benefit each other on product, on technology and on many other levels,” but she said nothing with regard to self-driving technology.
“The shift in Apple’s strategy to invest at such a scale highlights the strategic importance of the Chinese market to Apple both in terms of the scale of the opportunity and the need for local knowledge and local partnerships for it to further its position there,” Jack Kent, mobile director for research firm IHS Technology, told the Wall Street Journal.
Cook reflected these sentiments in a statement of his own, saying, “Didi exemplifies the innovation taking place in the iOS developer community in China. We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting them as they grow.”