Apple has invested $1bn in Didi Chuxing, China’s version of Uber, CEO Tim Cook said on Thursday.
Ahead of a high-profile visit to the country later in May, Cook told Reuters that the investment would create opportunities to partner with Didi – fuelling speculation that Apple is making a strategic investment that complements its own plans for a new electric car.
“We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” Cook said in the Reuters interview. “Of course, we believe it will deliver a strong return for our invested capital over time as well.”
Cook did acknowledge Apple’s electric car project, described by Tesla CEO Elon Musk as “an open secret”, which has included hiring specialist engineers and designers from companies including Tesla, Ford and GM, and public documentation that has shown Apple’s search for testing locations.
Apple’s only public car product is currently its CarPlay system, which connects Apple smartphones to a car’s entertainment system. “That is what we do today in the car business, so we will have to see what the future holds,” Cook said.
Electric, self-driving cars are a hot topic in the technology and auto industries, with rivals including Google, Tesla, Apple and others racing to developing compelling technologies and products.
Ride-hailing companies currently rely on independent human drivers, whose status as contractors has generated a string of legal cases – particularly for Uber – around regulation and employment law. Self-driving technologies would erase these complexities but also allow ride-hailing firms to focus on managing complex and lucrative data on the movement of people around cities, and the opportunities to monetise that by operating a fleet of self-driving cars.
Didi Chuxing dominates the country’s private ride-hailing market, and claims to have 300 million users in 400 cities across China who take 11m rides every day. Founder and CEO Cheng Wei said in a statement that Apple’s investment marks the company’s single largest investment so far.
Didi Chuxing also claims it accounts for 87% of China’s ride-hailing market, in which US-based Uber is trying to break through. According to its last funding round in December 2015, Uber is currently valued at $62.5bn; a funding round reported in February 2016 valued Didi Chuxing at $20bn.
Apple will be on a charm offensive during Cook’s visit to China, where its books and film services were shut down by the government only six months after launch. Its device sales are still growing China yet have slowed significantly along with the Chinese economy, and iPhone sales started falling for the first time in 2016 along with a general slowdown in smartphones.
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