Apple broadens Chinese horizons with $1 billion Didi Chuxing investment

Apple has invested $1 billion into Chinese private driver firm Didi Chuxing, indicating an attempt to shore up its presence in the country and diversify its portfolio.

Following a decline in iPhone sales and annual revenue, including a 26% YoY decline in China, CEO Tim Cook told Reuters Apple is making the investment for various strategic and financial reasons.

“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.”

As device penetration has plateaued the Chinese smartphone market has matured and a diversification of service offerings for Apple would be a pragmatic move, particularly in a market as influential as China. Investment into Didi Chuxing, which also benefits from backing by Alibaba and Tencent, could see Apple forge a stronger relationship with the Chinese authorities after it had its iBooks and iTunes services banned from the country earlier this year.

Disregarding the sheer size of the Chinese market, there may be strategic significance in Apple aligning itself with a major automotive player. There exists a potential opportunity with Didi Chuxing to integrate CarPlay among the fleet of vehicles used by the Uber-esque company; while it could also be a possible device distribution channel for Apple with Didi Chuxing’s drivers. Additional speculation from various sources, TechCrunch being one of them, suggests Apple could be priming the taxi firm as a target for its alleged electric car – codenamed Project Titan.

“The endorsement from Apple is an enormous encouragement and inspiration for our four-year-old company,” said Didi Chuxing CEO Cheng Wei. “DiDi will work hard with our drivers, riders and global partners, to make available to every citizen flexible and reliable mobility choices, and help cities solve transportation, environmental and employment challenges.”