Apple's $1 Billion Investment in Chinese Uber Competitor Expected to Open More Doors in China
Didi Chuxing may be five times the size of Uber in China.
— -- Apple announced it's giving Uber's biggest competitor in China a whopping $1 billion investment, a strategic move that gives the iPhone maker deeper inroads to Chinese consumers.
Didi Chuxing is China's largest taxi-hailing app in China, and may be at least five times the size of Uber in China, according to Stifel analyst George Askew.
Askew believes the investment is "the first of many transactions whereby Apple uses its checkbook to acquire minority stakes in interesting mobile products and services in China that have audience and monetization strategies," according to his research note today.
China is an increasingly important market for Apple, which reported its first-ever decline in revenue and iPhone sales last month. The $1 billion investment gives Apple an estimated 4 percent in Didi Chuxing, according to Askew.
Meanwhile, the investment is a major boost for Didi Chuxing in its battle against U.S.-based ride-sharing company Uber. The Chinese company provides a range of ride-sharing services, including taxi hailing, car pooling and bus sharing, Apple's investment is the largest investment Didi Chuxing has ever received. The company said it has 14 million registered drivers in more than 400 cities in China.
"DiDi exemplifies the innovation taking place in the iOS developer community in China," Tim Cook, Apple's CEO, said in a statement on Thursday. "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."
Chinese tech companies Tencent and Alibaba are already investors in Didi Chuxing, which has 300 million passengers, according to the Chinese ride-share platform company.
Apple's investment may be one of the first steps by Apple to build a competitor to the Chinese WeChat, the popular messaging service developed by Tencent, Askew said in his research note.
Didi Chuxing was previously called Didi Kuaidi. "Didi" refers to the sound of a car horn, while "Chuxing" means "mobility" in Chinese, according to a spokesperson. "Kuaidi" is a combination of the Chinese characters for "taxi" and "quick," according to VentureBeat.
Cheng Wei, founder and CEO of DiDi, said in a statement, "The endorsement from Apple is an enormous encouragement and inspiration for our four-year-old company. DiDi will work hard with our drivers, riders and global partners, to make available to every citizen flexible and reliable mobility choices, and help cities solve transportation, environmental and employment challenges."
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