Apple has invested $1bn in the Chinese ride-hailing app Didi Chuxing, which is involved in a costly battle with Uber, Sky News reports. The move, which is the largest single investment received by Didi, comes amid falling iPhone sales in China, and rumours of a possible Apple expansion into the transport sector.
Chief executive Tim Cook, who will travel to China next month, said the deal reflects the company’s “excitement” in Didi’s growing business and Apple’s “continued confidence in the long-term in China’s economy”. “We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” he added.
Didi dominates the Chinese car-hailing market with an 87% share, and claims to complete more than 11 million rides a day. In February Uber revealed it lost $1bn annually in China, while Didi’s president reportedly said last September that the company was “burning through cash”.
Both companies subsidise users’ journeys to attract customers. It is a rare investment for Apple, which analysts say may offer an indication of how it is attempting to diversify as iPhone sales show signs of maturing. Apple is thought to be developing driverless cars, and the investment may help it to gain a better understanding of the Chinese market before a rumoured expansion into transportation.
Chinese reports suggest the deal could also provide an opportunity for Apple Pay, which faces strong competition in the country. An article on Chinese website Huxiu said: “It is undoubtedly a good value for Apple to tie up with an app that has a large user base and where frequent payments are made.”
It is technically against the law for private cars to offer rides for payment in the country but, despite occasional arrests of drivers, regulations are not regularly enforced, allowing for the emergence of a number of ridesharing apps.
Didi, valued at upwards of $20bn, announced a partnership with Uber’s US rival Lyft last September. enabling Chinese customers to use the service when they visit America through the Didi app.