Eyeing a possible future tie-up, Apple has invested $1 billion in Didi Chuxing, a ride-hailing service in China.
In a move described by Apple CEO Tim Cook as one that would help the company better understand the Chinese market, Apple has announced that it has invested $1 billion in Didi Chuxing, a Chinese ride hailing service.
Apple’s decision to invest in China, is despite the pressures put by Chinese regulators which has shut down its film and online book services, last month. Apple’s move has been described as trying to re-invigorate its flagging sales in China. This line of thinking is underscored by the fact that Cook is set to travel to China sometime later this month.
For Apple, this is a strategic investment since it gives it a sizeable stake in Uber’s chief rival in China. Apple has already hired dozens of automotive experts in the past and has stated that he sees scope for future collaboration between the two companies in the future.
“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,” said Cook.
As for Didi Chuxing, it has said that this was the single largest investment it has received from Apple. Previously the company had raised several billion dollars for its ride sharing venture in China. It has further disclosed that it typically does 11 million rides a day and has captured nearly 87% of the Chinese car-hailing market.
Investors are eagerly waiting to see whether Apple will enter the car market of the future since it is rumoured to be designing its own self-driving cars, as per sources.
Cook has however said, Apple is focused on its in-car experience with its CarPlay system which links smartphones to vehicle infotainment systems.
“That is what we do today in the car business, so we will have to see what the future holds,” said Cook.
Despite stagnant sales in China, Cook has stressed on the fact that he is confident on the Chinese market.
The deal “reflects our excitement about their growing business … and also our continued confidence in the long term in China’s economy,” said Cook.
Categories: Economy & Finance, HR & Organization, Strategy
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