Tech giant Apple has announced that it is taking a $1.3 billion stake in ride-sharing company Didi Chuxing, China’s own rival to Uber, marking the company’s first large-scale public move into the transportation industry.
Didi Chuxing, formerly known as Didi Kuaidi, is China’s largest ride-hailing service. Although it is touted as ‘the Uber of China’, the company actually crushes Uber and other competitors in its Chinese home market.
The company’s name in Chinese literally translates to “honk honk, commute”.
With 99 per cent market share in China’s taxi-hailing market and 87 per cent market share when it comes to hailing private vehicles – according to its own numbers – Didi Chuxing operates in over 400 cities across the country, compared to Uber China’s mere 45 cities.
Didi Chuxing’s services isn’t restricted to cars and taxis, either.It also offers bus services and even a chauffeur booking option – a useful option when someone needs a designated driver to take both the car and car owner home after a big night out.
The deal adds Apple to Didi Chuxing’s list of recent big-ticket investors, which also includes Chinese companies Tencent Holdings Limited and e-commerce giant Alibaba Group.
Above: Popular ride-sharing service Uber has struggled to make an impact in China
In a statement, Apple’s CEO Tim Cook said: “Didi Exemplifies the innovation taking place in the iOS developer community in China”.
“We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting the team as they grow,” he added.
While there has been no concrete details about the company’s plans for an “Apple Car”, there have already been reports of Apple running a top-secret car lab in Berlin, along with the registering of the web addresses Apple.car and Apple.auto.
The investment in Didi Chuxing is likely to be another attempt by Apple to increase its presence in the difficult Chinese market. Although China is Apple’s second largest market for its popular iPhone, the company recently removed Chinese access to its iTunes digital media store.
Apple’s sales in China have also been in decline, down 26 per cent year-over-year for the last quarter.
The new investment also spells more trouble for Uber, which is already struggling in the Chinese market. Uber CEO Travis Kalanick said earlier this year that the company is losing around $1 billion a year in China, mainly due to fierce competition from Didi Chuxing.
The funds are likely to be put towards the investment into artificial intelligence for Didi Chuxing’s system, which will make its service smarter in matching cars with customers, the company confirmed with business paper Bloomberg in April.
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