Friday, 13 May 2016
Apple invests $1 billion in Uber’s China rival Didi
Apple has invested $1 billion in Didi Chuxing, 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 iPhone maker.
The move is highly unusual for Apple, which has generally been quiet when it comes to deal-making.
While the company, based in Cupertino, California, has bought technology start-ups here and there, its last big investment was the acquisition of Beats, a headphone-maker and music service, for $3 billion in 2014.
At the time, the Beats deal was also regarded as a departure for Apple.
Apple’s move into a Chinese company is also notable. Apple is attempting to reinvigorate flagging iPhone sales in China, the company’s second-largest market, and just weeks after Apple shuttered its iBooks and iTunes movie 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’s sales have encountered a sharp slowdown in China. The company reported sales of $12.5 billion in Greater China, which includes China, Hong Kong and Taiwan, in its most recent fiscal quarter. That was down 26 percent from the previous year.
It had an operating profit of $4.8 billion from the region in the quarter, down 28 percent from the previous year.
Apple has been working on its own secret car project, which one independent analyst, Neil Cybart, said Wednesday had accounted for much of the billions of dollars in research and development spending by the company.
Money to spare
Apple certainly has the money to spare. As of March 26, the company said it had nearly $233 billion in cash and marketable securities.
An Apple spokeswoman referred back to Cook’s statement and did not add anything further. Uber declined to comment. At 4 years old, Didi Chuxing is China’s pre-eminent ride-hailing service and a major competitor to Uber, a U.S. company that is spending millions to make inroads into the Chinese market. Didi serves close to 300 million users across more than 400 Chinese cities, according to the company.
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