Apple (NASDAQ: AAPL) invested $1 billion in Didi Chuxing Technology Co., China’s biggest ride-hailing service, moving for the first time into on-demand transportation in one of the largest-ever strategic investments by the company.
Apple has been participating on electric and autonomous car technology since 2014, siphoning off key personnel from across the company and hiring automotive experts as staffing on the project grew to over 1,000 employees.
Apple is attempting to reinvigorate flagging iPhone sales in China, the company’s second-largest target market, and just in April Apple shuttered its iTunes and iBooks stores in the country.
“Didi exemplifies the innovation taking place in the iOS developer community in China,” Tim Cook, chief executive of Apple, said in a statement. “We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting them as they grow.”
Apple didn't elaborate on its motivations for investing in China’s homegrown competitor to Uber Technologies Inc. During a call with reporters on Friday, Didi President Jean Liu said the two companies are very confident we will benefit each other on product, on technology and on many other levels. She declined to state whether they would collaborate on autonomous vehicles.
The investment aligns Apple with China’s two largest Internet companies which are e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) and social media company Tencent Holding Ltd. Both of them also invested in Didi Chuxing Technology Co.
“The shift in Apple’s strategy to invest at such a scale highlights the strategic importance of the Chinese market to Apple both in terms of the scale of the opportunity and the need for local knowledge and local partnerships for it to further its position there,” said Jack Kent, mobile director for research firm IHS Technology.
Didi Chuxing Technology Co., which founded in 2012, is China’s pre-eminent ride-hailing service and a major competitor to Uber which spending millions to make inroads into the Chinese market. Didi now serves approximately 300 million users across over 400 Chinese cities.
Didi would provide Apple with a rich data source for its self-driving vehicle push. The company also could benefit Apple’s mobile ecosystem. Ride-sharing apps are nearly linked to payment services, such as Apple Pay.