13 ms·

Apple invests $1B in Chinese ride-hailing service Didi Chuxing

300 points by ssclafani 10y ago

aresant 10y ago
Are they investing in Didi the ride sharing company or investing in Didi, Uber's arch rival in China? The chess game afoot in the autonomous vehicle battle is attracting some strange bedfellows between Apple, Google, tesla, ford, Mercedes, Uber, Lyft, Volvo, Nvidia, etc. The end game is outrageously big, generationally big, and it's going to be a treat to watch the Titans lock horns.
- laluser 10y ago
  It's the same company.
  - stdgy 10y ago
    I believe aresant is questioning the motivation behind the investment. That is: - Is Apple investing in Didi in order to see a straightforward return on investment? Or - Is Apple investing in Didi in order to counter Uber's global expansion, so that they can begin to control the ride-share market themselves? Their motivation for the investment would say a lot about their intent regarding their automotive plans (Project Titan). If they are doing this simply because they have a mountain of spare change sitting around and would like to put it somewhere to see larger gains while rubbing elbows with China's establishment, it might not signal much about their automotive intent. But if they are making the investment to staunch Uber's expansion into Asia (And maybe India, given Didi's investors' related holdings) in order to secure a spot for themselves at the global table to cash in on autonomous auto service, that's a whole different ballgame. Edit: Formatting
  - ihsw 10y ago
    The question is framed to imply that they would not invest in Didi were Uber to not also be vying for power -- aka this is a swipe at Uber rather than a strategic investment in China. The actions may be identical but the intent is different.
- nostrademons 10y ago
  It'd be hilarious if we get viable telepresence before we get autonomous vehicles, and then the automobile market massively shrinks because nobody commutes to work anymore.
  - chatmasta 10y ago
    We already have close to perfect telepresence. Is a hologram really that much better than video? Real business will always be done face to face. When you're closing a $100m deal, you want to look the other person in the eye and shake their hand. Transportation cost is negligible at that level.
    - csallen 10y ago
      You answered your own question. Telepresence today isn't good enough to let you look the another person in the eye and shake hands. But it will be at some point.
      - chatmasta 10y ago
        At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it, but my personal opinion is that telepresence will never match real presence. If you're "shaking hands" with someone, the haptic feedback can never be more than a simulation. In no scenario short of teleportation will the molecules of your hand touch those of the other person's hand. If teleportation arrives, business meetings will be the last thing any car company needs to worry about.
        hguant 10y ago
        > At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it... This sentiment saddens me. The thought that philosophy - which begins with the examination of our beliefs and personal opinions through the lens of reason - could be considered impossible to talk about with nuance seems deeply wrong to me. If that's your experience, you've been exposed to some very wrong, or very modern, philosophers. Philosophy is just talking about being, and a conversation about simulated versus 'actual' reality is the best place for it.
deleted 10y ago
[deleted]
- vonsydov 10y ago
  he's just using the money you're giving them
sbuccini 10y ago
Apple has huge stores of cash sitting overseas. They can't bring it home without subject to large tax penalties. With that cash stockpile growing, it seems like they're having trouble finding ways to put that money to work overseas. I wonder if they would have still made this investment if they had the ability to bring that money back stateside without hefty tax liabilities. Regardless, a $1B is not a small chunk of change, even for Apple. Clearly, natural synergies could arise when Project Titan matures. But Apple tightly coupling itself with a rising player in the Chinese tech sector is a smart play (not to mention associating itself with other notable Didi investors like Alibaba). We've seen similar moves by Uber, who took a large investment from Baidu. Interesting times ahead.
- IBM 10y ago
  Tax reform has been kicking around for years in Congress (which would allow repatriation at a lower rate) and has fairly bipartisan support. It likely won't happen in an election year, but after November I'd say the odds go up significantly. I doubt that has anything to do with this investment. They've had no problem tapping the debt markets to buyback stock and pay dividends, they don't need access to their cash.
  - ProAm 10y ago
    Companies wont do it until its offered as full amnesty, especially companies as large as Apple, there is no reason for them to.
    - adventured 10y ago
      Sure there is. Apple has already accumulated a dangerous amount of debt, given their business is declining and global smartphone sales growth is inching closer to zero. Outside of the financial sector, they're now one of the world's largest corporate carriers of debt at $69.3 billion. At the pace they're picking up debt, they'll hit $100+ billion in debt in two years, while their annual profit and stock price declines simultaneously (upsetting investors, increasing pressure for greater dividends). Given their position in the smartphone market is in no way guaranteed or a monopoly, it's an extremely dangerous position they're putting themselves into. Apple would accept a 5% penalty on their pile of cash any day of the week to repatriate it. Their financial situation in the very near future will become such that they start to get threatened with credit downgrades as the debt piles up and their growth keeps going backwards or otherwise stagnates. What they're doing can't continue for more than a few more years before it causes serious problems.
desireco42 10y ago
And that is it. Owning a piece of such large Chinese company, Apple also gets a foothold into decision making in China and gets more say. Very smart. Jobs was a different person, Tim Cook leads company differently. I really like how he plays this.
- seizethecheese 10y ago
  This has much more to do with Apple building a car than it does with influencing decision making in China.
  - desireco42 10y ago
    You are probably right. However, by increasing their foothold in such big companies, they definitely have more say.
  - CameronBanga 10y ago
    I think you're wrong about this. The political good favor and potential for growth against competitors in China is a huge value. Well worth the investment.
    - Fricken 10y ago
      Apple could have chosen to throw money at any of a number of Chinese companies, but they chose Didi. I think it serves more than one strategic purpose, and hints at their intentions with project Titan.
  - nikatwork 10y ago
    China uses soft power and regulations to hamper foreign products, especially software. This investment will put Apple in good standing with the govt and could result in an easing of restrictions on Apple's other activities.
Aelinsaar 10y ago
It must be nice to have so much cash that a $1B stake can be seen as somewhat speculative. Incredible really.
kirykl 10y ago
With the scale of Chinese companies is $1b a large investment? The article says Didi has already raised several billion
electriclove 10y ago
This is about gathering real world data to further autonomous driving. Google has their small fleet collecting data; Tesla has tons of vehicles now collecting data; Uber has the potential to start collecting data. Apple has no ability to collect real world data... Until now?? Smart move Apple
- smaili 10y ago
  Does "investing" in a company imply access to their data?
  - shimms 10y ago
    If the deal terms stipulate it does then there is nothing implicit about it. If the data was Apple's motivation for this deal, or even an upside if not their primary motivation, I'm sure it'd be explicitly stated in an agreement that they get access to this data, yes.
- bluthru 10y ago
  I agree that this is one of the reasons Apple is investing, but Apple is already collecting street-level data: https://9to5mac.files.wordpress.com/2015/07/apple-maps-van-01.png https://9to5mac.files.wordpress.com/2015/07/apple-maps-van-0... Maybe we'll see a 3d street view with iOS 10.
salimmadjd 10y ago
Apple Map/Siri and Google map eventually will become the interface to ordering car sharing. Especially once there is autonomous cars and Uber or Lyft do not own the driver-side of the equation, ride sharing will become a bit like ordering rental cars from Kayak. The same way Facebook is becoming the interface to content, both google and apple will own the consumer side of the cars and help you pick the best deal or cheapest option. It could be from Uber, a guy who owns a fleet of 20 autonomous cars or Hertz, etc. This moves totally makes sense for Apple as they will move to own the consumer side of this market.
- discodave 10y ago
  Also Echo / Alexa.
- losty 10y ago
  Why assume Facebook will remain dominant?
  - Zyst 10y ago
    A lack of explicit mention is not an implication.
- Amygaz 10y ago
  "The same way Facebook is becoming the interface to content" I feel like I get all the relevant and useful content I need, while minimizing the noise, specifically because I am not using Facebook...
free2rhyme214 10y ago
I was just starting to doubt Apple, especially with their lackluster effort in artificial reality, and now I'm doing an about face. This is an incredibly smart move and a great long term play which will bode well for Project Titan.
jackieluo 10y ago
I haven't been this surprised by anything Apple's done in years. If moves like this one keep happening, the next few years are going to be pretty exciting to watch.
sangd 10y ago
It looks like Apple wants to get the Chinese super star startup(s) to depend more on their giant pile of oversea cash; thus to protect their brand, make their strong hold on this market which is influenced very much by the state. Look at their stock today, Google is surpassing and it has no other future rather than protecting its iPhone, iPad, Macs which are pretty much saturated.
iamgopal 10y ago
How economics works ? 1B$ for an app ? Innovative Small scale business are struggling to raise a million, and blatant copy cats raising billions ? Capitalism works correctly tho, what they have earn has to give back to earn more.
- ajharrison 10y ago
  It's not $1b for an app. Its for 87% of the ride sharing marketshare. They eventually want self-driving Apple cars driving people all over China (and eventually the world).
  - rasz_pl 10y ago
    If you knew anything about China you would know this is never going to happen. No business owned by a foreign entity is allowed to thrive. This $1B is a temporary ticket out of jail for Apple. Intel had to pay its $1.5B last year, Qualcomm didnt pay and was fined >$1B for 'abusing monopoly position'.
    - optforfon 10y ago
      "No business owned by a foreign entity is allowed to thrive." what....? Apple is thriving in China. Everyone and their mom has taken out loans to buy an IPhone. I'm not even exaggerating. Foreign cars outsell the locals brands by a large margin
- hueving 10y ago
  Nobody is buying these apps for the technology. It's for the market. It's not difficult to build a ride sharing app (it's all well known technology). It's difficult to gain market share.
- ravivyas 10y ago
  The app is just an interface to the service, which holds the actual value.
- NEDM64 10y ago
radicsge 10y ago
I hardly doubt this money is for real investment most probably just to please to government, this 1B is eventually will be distributed among citizens without a job. Also the big cities became super crowded as being extremly urbanized. In some days traffic jams starts at 3 and between 5-7 everything is just stuck. It might be also a way how goverment try to slightly reduce these issues.
- Cookingboy 10y ago
  Didi is a private company already worth billions. This isn't money to the government at all. So I don't see how it will be distributed to the unemployed. If they want to please the government they'd just pay more local tax.
  - partiallypro 10y ago
    You clearly don't know how business operates in China. China doesn't care about tax revenue or deficits, they want capital investment and capital expenditures (especially in light of recent record capital outflows.) They have strict capital flows for a reason. In China there isn't really a private/public divide like the U.S., bribing and knowing people in government is absolutely essential in China. Sure, it helps in the U.S. (and every other country), but it's not essential. China is a different beast. Doing business in mainland China is quite the experience, I know of no one who actually likes doing it. The Chinese are still communists after all, and if you have a supplier there...they are not loyal. They will knock your stuff off in a heart beat as soon as you leave.
    - Cookingboy 10y ago
      Well I actually know people who like doing business in China, namely my parents, who own a medium sized tech company there. There absolutely still is a difference between private and state-owned companies. There are even cases where Huawei loses government contracts to Cisco. Like you said, the water is murky in China, and the favor of Chinese government cannot just be bought by a tiny investment such as this. There is no guarantee that just because you are a Chinese company, the government will be on your good side. At one point Alipay was almost banned due to some central bank regulation. Didi also has a competitor named Kuaidi, which for all we know can have even deeper connections with the CPC.
zer00eyz 10y ago
Apple didn't do this because they are building a "self driving car" that they are going to sell. Apple wants to get ibooks and movies selling in china again, it is vital to apples car strategy. This move will give them some leverage with china in getting those markets back to being active. If you know anything about Tim Cook, you know that he is master of the supply chain. I don't think that someone like that is going to jump into apple building its own car. So if apple isn't going to build a car, what ARE they doing with all these people on the pay roll who have worked with cars. Its simple, apple wants to own the dashboard of the car, were not talking about "carplay" were talking about the WHOLE dashboard. Once you own the dashboard, your hooked into location, and destination (apple owns a mapping solution) they can leave it to vendors of vehicles to do the "self driving" compontent. Why would any automaker want apple in the dashboard? Why would apple want the dashboard? Its simple, entertainment! Apple with the beats acquisition owns something that looks like radio, and music has always been there with iTunes. There is no reason you can't rent movies and books into the back seat as well.
- prawn 10y ago
  In 3-5+ years, will we be looking at dashboards or head-mounted displays?
  - zer00eyz 10y ago
    I don't think it matters if it is a screen on the dash or one you wear. If it is deeply integrated with your car, it has access to a lot more power, cooling and storage than anything mobile.
    - prawn 10y ago
      My laptop has loads of storage, but at home I look at my phone or TV - both streaming all their content. A car dashboard, even futuristic, is fairly limited in size unless the entire windscreen is a display, you're sitting in the front seats, and both of you are happy to look at the same thing...
- phodo 10y ago
JayeshSidhwani 10y ago
Could this also be because Apple would want to test their experiments in self-driving cars?
devy 10y ago
There were a few ideas floating around Chinese tech blogs, of the most possible reasons are: 1. Integrate Apple Pay into Didi Chuxing apps, which is estimated to have 300MM users in China[1]. Didi currently only accepts payment with Weixin(aka WeChat) Pay and Ali Pay (aka Ant Financial Services Group, owned by Alibaba Group). 2. Massive data points for developing Apple's self-driving technology. Didi operates in 400 Chinese cities with over 11 million rides per day, and accounts for 80% private car hailing market and 99% taxi hailing market.[2] 3. And yes, investing into Chinese tech sector give them a better leverage in negotiations with the government and also like sbuccini said, association with other Didi's major investors. [1]: http://www.theverge.com/2016/5/12/11669178/apple-invests-1-billion-in-chinese-transportation-service-didi-chuxing http://www.theverge.com/2016/5/12/11669178/apple-invests-1-b... [2]: https://en.wikipedia.org/wiki/Didi_Chuxing https://en.wikipedia.org/wiki/Didi_Chuxing
- panpanxu 10y ago
  For the second point, i wonder if there is any potential restriction on transferring this kind of data to US ...
  - yompers888 10y ago
    The juxtaposition of this possible use of data by Apple (as an investor) with Chinese state-sponsored large-scale theft of technical data by security breach is wonderful.
  - foxhedgehog 10y ago
    I assume that this acquisition would also be a natural consumer of any future car technology developed by Apple
    - nxzero 10y ago
      Apple didn't acquire they company, they invested in it; Didi valuation is in the 10s of billions, besides, buying them out right would have less value to Apple.
- 10y ago
eddieplan9 10y ago
From the article: > "(The deal reflects) our continued confidence in the long term in China’s economy," Cook said. If this is not kowtowing, I don't know what is. This is very disappointing coming from a company like Apple.
dingo_bat 10y ago
Is there any reason Didi Chuxing is valued higher than Uber. Uber is the innovator and present all around the world. Why is it still lower-valued than Didi?
swyman 10y ago
Probably dumb hypothetical: What happens if Apple comes up with an excuse to remove Uber from the (Chinese) App Store and corresponding iPhones?
- mmahemoff 10y ago
  A holy shitstorm? But it won't happen. The same logic would apply to apps from other fierce competition, e.g. Google Maps and Skype. While there have been some occasional issues with upgrades being rejected, the apps have been allowed to remain on the store. The more contentious issue is with builtin apps and platform capabilities, e.g. it's possible Apple's map could show directions and prompt a one-click Didi ride. Google already does something like that with Uber, but it could be even more tightly integrated with payments, and in a way that the platform could favour certain providers.
  - hockley 10y ago
    The Chinese government could certainly come up with an excuse to block Uber in China.
- NEDM64 10y ago
  An antitrust, where Apple would lose.
chj 10y ago
One thing to be sure, uber will have a hard time in China.
molmalo 10y ago
While I do believe that they are investing in Didi with the dual intent of gaining access to their massive riding data, and position themselves as providers for future autonomous vehicles, I also believe (and I could be very wrong) that they may be funneling money through China, for their US-based facilities. I mean, could this be related with Faraday Future? The mysterious "US-based, Chinese-backed company" that plans to invest $1B in California, "focused on the development of intelligent electric vehicles and mobility solutions" [1], that many suspected it's a front for Apple's car. [1] https://en.wikipedia.org/wiki/Faraday_Future https://en.wikipedia.org/wiki/Faraday_Future
- snsr 10y ago
  I doubt it (re: Faraday) - http://lasvegassun.com/news/2016/may/11/faraday-futures-financial-strength-in-question-for/ http://lasvegassun.com/news/2016/may/11/faraday-futures-fina...
davidiach 10y ago
"The company said it completes more than 11 million rides a day, with more than 87 percent of the market for private car-hailing in China." If they make $1.00 for each ride, that's already more than $4 billion in revenue per year.
- ndirish1842 10y ago
  China is still a developing market for ride hailing/sharing. The margins aren't that good. In fact, with the amount Uber/Didi are spending on driver/rider acquisition, they're both probably bleeding cash like crazy.
qaq 10y ago
Apple to follow in Yahoo footsteps skip 10 years this might be the most valuable part of Apple :)

300 points by ssclafani 10y ago

Are they investing in Didi the ride sharing company or investing in Didi, Uber's arch rival in China? The chess game afoot in the autonomous vehicle battle is attracting some strange bedfellows between Apple, Google, tesla, ford, Mercedes, Uber, Lyft, Volvo, Nvidia, etc. The end game is outrageously big, generationally big, and it's going to be a treat to watch the Titans lock horns.

laluser 10y ago
It's the same company.
- stdgy 10y ago
  I believe aresant is questioning the motivation behind the investment. That is: - Is Apple investing in Didi in order to see a straightforward return on investment? Or - Is Apple investing in Didi in order to counter Uber's global expansion, so that they can begin to control the ride-share market themselves? Their motivation for the investment would say a lot about their intent regarding their automotive plans (Project Titan). If they are doing this simply because they have a mountain of spare change sitting around and would like to put it somewhere to see larger gains while rubbing elbows with China's establishment, it might not signal much about their automotive intent. But if they are making the investment to staunch Uber's expansion into Asia (And maybe India, given Didi's investors' related holdings) in order to secure a spot for themselves at the global table to cash in on autonomous auto service, that's a whole different ballgame. Edit: Formatting
- ihsw 10y ago
  The question is framed to imply that they would not invest in Didi were Uber to not also be vying for power -- aka this is a swipe at Uber rather than a strategic investment in China. The actions may be identical but the intent is different.
nostrademons 10y ago
It'd be hilarious if we get viable telepresence before we get autonomous vehicles, and then the automobile market massively shrinks because nobody commutes to work anymore.
- chatmasta 10y ago
  We already have close to perfect telepresence. Is a hologram really that much better than video? Real business will always be done face to face. When you're closing a $100m deal, you want to look the other person in the eye and shake their hand. Transportation cost is negligible at that level.
  - csallen 10y ago
    You answered your own question. Telepresence today isn't good enough to let you look the another person in the eye and shake hands. But it will be at some point.
    - chatmasta 10y ago
      At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it, but my personal opinion is that telepresence will never match real presence. If you're "shaking hands" with someone, the haptic feedback can never be more than a simulation. In no scenario short of teleportation will the molecules of your hand touch those of the other person's hand. If teleportation arrives, business meetings will be the last thing any car company needs to worry about.
      - hguant 10y ago
        > At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it... This sentiment saddens me. The thought that philosophy - which begins with the examination of our beliefs and personal opinions through the lens of reason - could be considered impossible to talk about with nuance seems deeply wrong to me. If that's your experience, you've been exposed to some very wrong, or very modern, philosophers. Philosophy is just talking about being, and a conversation about simulated versus 'actual' reality is the best place for it.

deleted 10y ago

[deleted]

vonsydov 10y ago
he's just using the money you're giving them

sbuccini 10y ago

Apple has huge stores of cash sitting overseas. They can't bring it home without subject to large tax penalties. With that cash stockpile growing, it seems like they're having trouble finding ways to put that money to work overseas. I wonder if they would have still made this investment if they had the ability to bring that money back stateside without hefty tax liabilities. Regardless, a $1B is not a small chunk of change, even for Apple. Clearly, natural synergies could arise when Project Titan matures. But Apple tightly coupling itself with a rising player in the Chinese tech sector is a smart play (not to mention associating itself with other notable Didi investors like Alibaba). We've seen similar moves by Uber, who took a large investment from Baidu. Interesting times ahead.

IBM 10y ago
Tax reform has been kicking around for years in Congress (which would allow repatriation at a lower rate) and has fairly bipartisan support. It likely won't happen in an election year, but after November I'd say the odds go up significantly. I doubt that has anything to do with this investment. They've had no problem tapping the debt markets to buyback stock and pay dividends, they don't need access to their cash.
- ProAm 10y ago
  Companies wont do it until its offered as full amnesty, especially companies as large as Apple, there is no reason for them to.
  - adventured 10y ago
    Sure there is. Apple has already accumulated a dangerous amount of debt, given their business is declining and global smartphone sales growth is inching closer to zero. Outside of the financial sector, they're now one of the world's largest corporate carriers of debt at $69.3 billion. At the pace they're picking up debt, they'll hit $100+ billion in debt in two years, while their annual profit and stock price declines simultaneously (upsetting investors, increasing pressure for greater dividends). Given their position in the smartphone market is in no way guaranteed or a monopoly, it's an extremely dangerous position they're putting themselves into. Apple would accept a 5% penalty on their pile of cash any day of the week to repatriate it. Their financial situation in the very near future will become such that they start to get threatened with credit downgrades as the debt piles up and their growth keeps going backwards or otherwise stagnates. What they're doing can't continue for more than a few more years before it causes serious problems.

desireco42 10y ago

And that is it. Owning a piece of such large Chinese company, Apple also gets a foothold into decision making in China and gets more say. Very smart. Jobs was a different person, Tim Cook leads company differently. I really like how he plays this.

seizethecheese 10y ago
This has much more to do with Apple building a car than it does with influencing decision making in China.
- desireco42 10y ago
  You are probably right. However, by increasing their foothold in such big companies, they definitely have more say.
- CameronBanga 10y ago
  I think you're wrong about this. The political good favor and potential for growth against competitors in China is a huge value. Well worth the investment.
  - Fricken 10y ago
    Apple could have chosen to throw money at any of a number of Chinese companies, but they chose Didi. I think it serves more than one strategic purpose, and hints at their intentions with project Titan.
- nikatwork 10y ago
  China uses soft power and regulations to hamper foreign products, especially software. This investment will put Apple in good standing with the govt and could result in an easing of restrictions on Apple's other activities.

Aelinsaar 10y ago

It must be nice to have so much cash that a $1B stake can be seen as somewhat speculative. Incredible really.

kirykl 10y ago

With the scale of Chinese companies is $1b a large investment? The article says Didi has already raised several billion

electriclove 10y ago

This is about gathering real world data to further autonomous driving. Google has their small fleet collecting data; Tesla has tons of vehicles now collecting data; Uber has the potential to start collecting data. Apple has no ability to collect real world data... Until now?? Smart move Apple

smaili 10y ago
Does "investing" in a company imply access to their data?
- shimms 10y ago
  If the deal terms stipulate it does then there is nothing implicit about it. If the data was Apple's motivation for this deal, or even an upside if not their primary motivation, I'm sure it'd be explicitly stated in an agreement that they get access to this data, yes.
bluthru 10y ago
I agree that this is one of the reasons Apple is investing, but Apple is already collecting street-level data: https://9to5mac.files.wordpress.com/2015/07/apple-maps-van-01.png https://9to5mac.files.wordpress.com/2015/07/apple-maps-van-0... Maybe we'll see a 3d street view with iOS 10.

salimmadjd 10y ago

Apple Map/Siri and Google map eventually will become the interface to ordering car sharing. Especially once there is autonomous cars and Uber or Lyft do not own the driver-side of the equation, ride sharing will become a bit like ordering rental cars from Kayak. The same way Facebook is becoming the interface to content, both google and apple will own the consumer side of the cars and help you pick the best deal or cheapest option. It could be from Uber, a guy who owns a fleet of 20 autonomous cars or Hertz, etc. This moves totally makes sense for Apple as they will move to own the consumer side of this market.

discodave 10y ago
Also Echo / Alexa.
losty 10y ago
Why assume Facebook will remain dominant?
- Zyst 10y ago
  A lack of explicit mention is not an implication.
Amygaz 10y ago
"The same way Facebook is becoming the interface to content" I feel like I get all the relevant and useful content I need, while minimizing the noise, specifically because I am not using Facebook...

free2rhyme214 10y ago

I was just starting to doubt Apple, especially with their lackluster effort in artificial reality, and now I'm doing an about face. This is an incredibly smart move and a great long term play which will bode well for Project Titan.

jackieluo 10y ago

I haven't been this surprised by anything Apple's done in years. If moves like this one keep happening, the next few years are going to be pretty exciting to watch.

sangd 10y ago

It looks like Apple wants to get the Chinese super star startup(s) to depend more on their giant pile of oversea cash; thus to protect their brand, make their strong hold on this market which is influenced very much by the state. Look at their stock today, Google is surpassing and it has no other future rather than protecting its iPhone, iPad, Macs which are pretty much saturated.

iamgopal 10y ago

How economics works ? 1B$ for an app ? Innovative Small scale business are struggling to raise a million, and blatant copy cats raising billions ? Capitalism works correctly tho, what they have earn has to give back to earn more.

ajharrison 10y ago
It's not $1b for an app. Its for 87% of the ride sharing marketshare. They eventually want self-driving Apple cars driving people all over China (and eventually the world).
- rasz_pl 10y ago
  If you knew anything about China you would know this is never going to happen. No business owned by a foreign entity is allowed to thrive. This $1B is a temporary ticket out of jail for Apple. Intel had to pay its $1.5B last year, Qualcomm didnt pay and was fined >$1B for 'abusing monopoly position'.
  - optforfon 10y ago
    "No business owned by a foreign entity is allowed to thrive." what....? Apple is thriving in China. Everyone and their mom has taken out loans to buy an IPhone. I'm not even exaggerating. Foreign cars outsell the locals brands by a large margin
hueving 10y ago
Nobody is buying these apps for the technology. It's for the market. It's not difficult to build a ride sharing app (it's all well known technology). It's difficult to gain market share.
ravivyas 10y ago
The app is just an interface to the service, which holds the actual value.
NEDM64 10y ago

radicsge 10y ago

I hardly doubt this money is for real investment most probably just to please to government, this 1B is eventually will be distributed among citizens without a job. Also the big cities became super crowded as being extremly urbanized. In some days traffic jams starts at 3 and between 5-7 everything is just stuck. It might be also a way how goverment try to slightly reduce these issues.

Cookingboy 10y ago
Didi is a private company already worth billions. This isn't money to the government at all. So I don't see how it will be distributed to the unemployed. If they want to please the government they'd just pay more local tax.
- partiallypro 10y ago
  You clearly don't know how business operates in China. China doesn't care about tax revenue or deficits, they want capital investment and capital expenditures (especially in light of recent record capital outflows.) They have strict capital flows for a reason. In China there isn't really a private/public divide like the U.S., bribing and knowing people in government is absolutely essential in China. Sure, it helps in the U.S. (and every other country), but it's not essential. China is a different beast. Doing business in mainland China is quite the experience, I know of no one who actually likes doing it. The Chinese are still communists after all, and if you have a supplier there...they are not loyal. They will knock your stuff off in a heart beat as soon as you leave.
  - Cookingboy 10y ago
    Well I actually know people who like doing business in China, namely my parents, who own a medium sized tech company there. There absolutely still is a difference between private and state-owned companies. There are even cases where Huawei loses government contracts to Cisco. Like you said, the water is murky in China, and the favor of Chinese government cannot just be bought by a tiny investment such as this. There is no guarantee that just because you are a Chinese company, the government will be on your good side. At one point Alipay was almost banned due to some central bank regulation. Didi also has a competitor named Kuaidi, which for all we know can have even deeper connections with the CPC.

zer00eyz 10y ago

Apple didn't do this because they are building a "self driving car" that they are going to sell. Apple wants to get ibooks and movies selling in china again, it is vital to apples car strategy. This move will give them some leverage with china in getting those markets back to being active. If you know anything about Tim Cook, you know that he is master of the supply chain. I don't think that someone like that is going to jump into apple building its own car. So if apple isn't going to build a car, what ARE they doing with all these people on the pay roll who have worked with cars. Its simple, apple wants to own the dashboard of the car, were not talking about "carplay" were talking about the WHOLE dashboard. Once you own the dashboard, your hooked into location, and destination (apple owns a mapping solution) they can leave it to vendors of vehicles to do the "self driving" compontent. Why would any automaker want apple in the dashboard? Why would apple want the dashboard? Its simple, entertainment! Apple with the beats acquisition owns something that looks like radio, and music has always been there with iTunes. There is no reason you can't rent movies and books into the back seat as well.

prawn 10y ago
In 3-5+ years, will we be looking at dashboards or head-mounted displays?
- zer00eyz 10y ago
  I don't think it matters if it is a screen on the dash or one you wear. If it is deeply integrated with your car, it has access to a lot more power, cooling and storage than anything mobile.
  - prawn 10y ago
    My laptop has loads of storage, but at home I look at my phone or TV - both streaming all their content. A car dashboard, even futuristic, is fairly limited in size unless the entire windscreen is a display, you're sitting in the front seats, and both of you are happy to look at the same thing...
phodo 10y ago

JayeshSidhwani 10y ago

Could this also be because Apple would want to test their experiments in self-driving cars?

devy 10y ago

There were a few ideas floating around Chinese tech blogs, of the most possible reasons are: 1. Integrate Apple Pay into Didi Chuxing apps, which is estimated to have 300MM users in China[1]. Didi currently only accepts payment with Weixin(aka WeChat) Pay and Ali Pay (aka Ant Financial Services Group, owned by Alibaba Group). 2. Massive data points for developing Apple's self-driving technology. Didi operates in 400 Chinese cities with over 11 million rides per day, and accounts for 80% private car hailing market and 99% taxi hailing market.[2] 3. And yes, investing into Chinese tech sector give them a better leverage in negotiations with the government and also like sbuccini said, association with other Didi's major investors. [1]: http://www.theverge.com/2016/5/12/11669178/apple-invests-1-billion-in-chinese-transportation-service-didi-chuxing http://www.theverge.com/2016/5/12/11669178/apple-invests-1-b... [2]: https://en.wikipedia.org/wiki/Didi_Chuxing https://en.wikipedia.org/wiki/Didi_Chuxing

panpanxu 10y ago
For the second point, i wonder if there is any potential restriction on transferring this kind of data to US ...
- yompers888 10y ago
  The juxtaposition of this possible use of data by Apple (as an investor) with Chinese state-sponsored large-scale theft of technical data by security breach is wonderful.
- foxhedgehog 10y ago
  I assume that this acquisition would also be a natural consumer of any future car technology developed by Apple
  - nxzero 10y ago
    Apple didn't acquire they company, they invested in it; Didi valuation is in the 10s of billions, besides, buying them out right would have less value to Apple.
10y ago

eddieplan9 10y ago

From the article: > "(The deal reflects) our continued confidence in the long term in China’s economy," Cook said. If this is not kowtowing, I don't know what is. This is very disappointing coming from a company like Apple.

dingo_bat 10y ago

Is there any reason Didi Chuxing is valued higher than Uber. Uber is the innovator and present all around the world. Why is it still lower-valued than Didi?

swyman 10y ago

Probably dumb hypothetical: What happens if Apple comes up with an excuse to remove Uber from the (Chinese) App Store and corresponding iPhones?

mmahemoff 10y ago
A holy shitstorm? But it won't happen. The same logic would apply to apps from other fierce competition, e.g. Google Maps and Skype. While there have been some occasional issues with upgrades being rejected, the apps have been allowed to remain on the store. The more contentious issue is with builtin apps and platform capabilities, e.g. it's possible Apple's map could show directions and prompt a one-click Didi ride. Google already does something like that with Uber, but it could be even more tightly integrated with payments, and in a way that the platform could favour certain providers.
- hockley 10y ago
  The Chinese government could certainly come up with an excuse to block Uber in China.
NEDM64 10y ago
An antitrust, where Apple would lose.

chj 10y ago

One thing to be sure, uber will have a hard time in China.

molmalo 10y ago

While I do believe that they are investing in Didi with the dual intent of gaining access to their massive riding data, and position themselves as providers for future autonomous vehicles, I also believe (and I could be very wrong) that they may be funneling money through China, for their US-based facilities. I mean, could this be related with Faraday Future? The mysterious "US-based, Chinese-backed company" that plans to invest $1B in California, "focused on the development of intelligent electric vehicles and mobility solutions" [1], that many suspected it's a front for Apple's car. [1] https://en.wikipedia.org/wiki/Faraday_Future https://en.wikipedia.org/wiki/Faraday_Future

snsr 10y ago
I doubt it (re: Faraday) - http://lasvegassun.com/news/2016/may/11/faraday-futures-financial-strength-in-question-for/ http://lasvegassun.com/news/2016/may/11/faraday-futures-fina...

davidiach 10y ago

"The company said it completes more than 11 million rides a day, with more than 87 percent of the market for private car-hailing in China." If they make $1.00 for each ride, that's already more than $4 billion in revenue per year.

ndirish1842 10y ago
China is still a developing market for ride hailing/sharing. The margins aren't that good. In fact, with the amount Uber/Didi are spending on driver/rider acquisition, they're both probably bleeding cash like crazy.

qaq 10y ago

Apple to follow in Yahoo footsteps skip 10 years this might be the most valuable part of Apple :)