Apple Inc announced Thursday that it invested $1 billion in Didi Chuxing a ride-hailing service based in China. The move, said Tim Cook the CEO at Apple would help it better understand the very important Chinese market.
The tech behemoth’s rare investment allows it to have a stake in two growing waves of technology – car technology and the sharing economy, as the maker of iPhones shows signs its sales are maturing for its smarpthone.
Apple is attempting to reinvigorate is sales across China, where it has had great pressure from the country’s regulators and Cook will travel there this month.
The move aligns the iPhone maker with the chief rival of Uber Technologies in China, as automakers and companies specializing in technology are forging alliances and making cross investments.
General Motors recently bought Cruise Automation an autonomous driving tech company and has purchased a stake in Lyft the ride sharing company in the U.S.
Cooks said during one of his interviews that he knew of opportunities for Apple and Didi to collaborate during the future.
Didi Chuxing, formerly called Didi Kuaidi, said during a statement that the investment by Apple was the single largest ever for the company.
The company raised several billions in dollars, dominates the market for riding sharing in China. The ride-sharing company completes over 11 million rides per day with over 87% of the private car hailing market in China.
Though Didi Chuxing is valued at close to $20 billion, the company has lost billions in its battle against Uber to take the higher market share in China.
Analysts said this new deal offers a look of how Apple might diversify its company as its sales of the iPhone begin to level off.
Apple emphasized its growing revenue from its services like Apple Music and Apple Pay the mobile payment system, a strategy that the investment in ride-sharing appears to reinforce, an analyst in Wall Street said.
Investors are watching eagerly to see if Apple will enter the automotive industry. Apple hired a number of automotive experts and the business is looking into building driverless vehicles, said sources close to the matter.
Cook announced that Apple remained focused on the experience “in-car” with its system of CarPlay, which links a smartphone to vehicle entertainment systems.
Although sales at Apple in China have dropped amidst the slowing growth in the economy, Cooke stressed that he was fully confident in that market.