A journalist uses cab-hailing app Didi to pay the bill in Beijing in February 2014. (Shen Bohan/Xinhua/Zuma Press/TNS)

Why Apple Is Investing $1 Billion In Didi, China’s Version Of Uber

By Julie Makinen
Los Angeles Times

WWR Article Summary (tl;dr) Apple’s $1 billion investment in Didi comes as San Francisco-based rival Uber has struggled to gain a foothold in China. Apple recently introduced Apple Pay in the country, but it is up against fierce domestic rivals with a big head start, including Alibaba’s Alipay and Tencent’s WeChat Pay. Apple’s iTunes movie and iBook services were recently suspended in China. A tie-up with Didi Chuxing, the biggest ride-hailing platform in China, could provide a leg up.

BEIJING

With sales of iPhones slowing in mainland China and Apple running into trouble with regulators there, the Cupertino, Calif.-based company may see its $1 billion investment in ride-hailing service Didi Chuxing as a source of new revenue streams and goodwill in the massive market.

Apple recently introduced Apple Pay in the country, but it is up against fierce domestic rivals with a big head start, including Alibaba’s Alipay and Tencent’s WeChat Pay. Apple’s iTunes movie and iBook services were recently suspended in China.

A tie-up with Didi Chuxing, the biggest ride-hailing platform in China, could provide a leg up.

Didi says it works with more than 14 million drivers in 400 Chinese cities and has 300 million users who place 11 million ride orders a day.

The investment, which Didi announced late Thursday, comes as San Francisco-based rival Uber has struggled to gain a foothold in China. Uber Chief Executive Travis Kalanick recently told tech site Betakit that his company is losing $1 billion a year there.

Chinese analysts also speculate that Apple might be interested in tapping Didi’s massive trove of data on ride-hailing and car usage to inform Apple’s own development of a high-tech, self-driving car, which has long been rumored. Map services are another conceivable area of cooperation.

With Apple’s growth prospects stunted, the company’s quarterly sales recently dropped for the first time in 13 years, and its stock price, at about $90 a share, is the lowest since the summer of 2014, analysts have been anxious to see it invest some of its $200 billion of cash and securities, much of which is stashed overseas.

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