Apple announced the somewhat surprising move this morning of a $1 billion investment into Didi Chuxing — a ridesharing service that acts as one of Uber's main rivals in China. Apple CEO Tim Cook says the move was undertaken in an attempt to learn more about and understand the Chinese market.
The move also comes as iPhone sales are leveling (evidence that the product is maturing) and is well explained by an Apple that is looking to expand its influence where the technology is on fire, which, these days, is in the sharing economy and cars. Apple is also looking to boost sales in China, particularly after running into some regulatory hurdles recently.
Cook said in an interview that he saw opportunities for Apple and Didi Chuxing to collaborate 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," he said. "Of course, we believe it will deliver a strong return for our invested capital over time as well."
Didi Chuxing noted in a statement that this was the single largest investment it has ever received. The company currently dominates the ridesharing market in China. With 11 million rides per day completed, Didi reportedly controls 87 or so percent of the car-hailing market in China. Didi Chuxing is currently valued at upwards of $20 billion.
"After all the hints about the service business and what they would like to do in the future, it’s all starting to fit together," noted Moor Insights & Strategy Analyst Patrick Moorhead.
This has also jumpstarted more talk about Apple's car ambitions, as the firm has recently been hiring and investing in automotive expertise.
Cook said Apple remained focused on the 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," he said.
Although Apple's sales in China have slumped lately, Cook stressed he remained confident in the market.
"[The deal] reflects our excitement about their growing business ... and also our continued confidence in the long term in China’s economy," Cook said.
Didi President Jean Liu is the daughter of Liu Chuanzhi, the politically connected founder of Chinese computer maker Lenovo Group Ltd.
"There's a lot of things we can work on together," she said when asked whether Didi Chuxing would help Apple's government relations in China.