“We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” Apple CEO Tim Cook said in an interview with Reuters. “Of course, we believe it will deliver a strong return for our invested capital over time as well.”
With the Apple investment, the tech giant will be involved in developing Didi’s technology and product strategies, according to the Beijing-based company. Didi, like Uber, relies on smartphone apps for users to order rides, hence Apple’s interest in coupling with the Chinese startup. Apple also has launched an automotive product initiative, but hasn’t disclosed details about the “Apple Car” yet.
According to Didi Chuxing, the company completes more than 11 million rides a day, representing a 87% share of China’s private car-hailing sector. It said Apple’s $1 billion stake is the single biggest investment it has received to date; other investors in Didi include Alibaba Group and Tencent Holdings.
Apple’s Didi investment also looks aimed at building goodwill with Chinese government authorities. Last month, Apple was forced to shut down its iTunes Movies and iBooks services in Mainland China just seven months after launch, evidently because of new regulations governing online content from foreign companies.
Uber CEO Travis Kalanick noted in a wry tweet Friday morning that his girlfriend owns shares of Apple, so she’s now an investor in one of his company’s biggest competitors:
— travis kalanick (@travisk) May 13, 2016
Analysts said Apple’s move reflects the strategic importance of the Chinese market, where sales of iPhones have been slowing over the past several quarters.
“As Didi operates across the Chinese market, not just on Apple devices, it could help Apple gain greater insight into the behavior of users beyond its own ecosystem,” said Jack Kent, an analyst at research firm IHS Technology.