Apple says it has invested $1bn (£693m) in Didi Chuxing, China’s leading car-hailing app, which commands a greater local market share than U.S. rival Uber. The development comes at a time when Apple has been striving to boost sales in China, its second-largest market after the US.
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On the other hand, Apple CEO Tim Cook said in an interview with Reuters that the company’s initiative is based on several strategic plans such as learning more of China market’s segment.
While the investment is the largest ever for Didi Chuxing, the company is well beyond establishing itself in China. “Of course, we believe it will deliver a strong return for our invested capital over time as well”, Cook said, according to Reuters.
China’s ride-hailing industry has grown rapidly, with competitors spending heavily to subsidize rides to capture market share.
The Chinese firm says it completes 11 million rides a day on its platform, serving close to 300 million users across 400 Chinese cities.
Didi Chuxing was previously called Didi Kuaidi.
General Motors, for example, recently bought autonomous driving technology company Cruise Automation and has also taken a stake in the United States ride-sharing company Lyft. Apple’s online book and movie services were suspended by Chinese regulators in the country last month, as the country cracks down on online media, according to people familiar with the discussions.
“[The deal] reflects our excitement about their growing business. and also our continued confidence in the long term in China’s economy”, Cook said.
Chief Executive Officer of Didi Chuxing told that it is their privilege to work along with Apple, and they hope that it will create an extra mileage for the four-year-old company.
The tech giant’s rare investment gives it a stake in two burgeoning waves of technology – the sharing economy and vehicle technology – as the iPhone business that propelled it to record profitability shows some signs of maturing.
Apple, which boasts of cash holdings of $233 billion, spooked investors in its latest quarterly earnings where it said net income fell to $10.5 billion from $13.6 billion in the same quarter previous year. In December, their alliance added India’s Ola and Southeast Asia’s GrabTaxi.
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Apple’s sales in China fell 26% on the year in the January-March quarter.
