Apple invests in China taxi app

The Beijing-based company announced Friday, Apple planned to invest $1 billion (882 million euros) in its services, making it the "single largest" investment Didi Chuxing had ever received.

In the endeavor, Apple joins Chinese internet giants Tencent and Alibaba, who've already taken shares in the company.

Apparently, Apple's move comes out of strategic rather than financial considerations. Apple chief executive Tim Cook told the official Chinese news agency Xinhua that he saw "lots of opportunities for closer cooperation" between the two companies.

"We decided to make the investment for a number of strategic reasons, including the chance to learn more about certain segments of the China market", Cook said.

Looking beyond smartphones

According to company figures, Didi Chuxing completes more than 11 million rides a day, giving it an 87-percent share of the Chinese private car-hailing market.

The deal fits Apple's drive to diversify its business as sales of the iPhone begin to slow across the world. Patrick Moorhead, analyst with Moor Insights & Strategy, sees the investment as a move to reinforce Apple's focus on services such as Apple Music and Apple Pay.

"After all the hints about the service business and what they would like to do in the future, it's all starting to fit together," he told the news agency Reuters.

Apple shares have lost more than 13 percent since the Cupertino, Calif.-based company reported its first ever drop in iPhone sales on April 26. In China, Apple is especially under pressure and has had to endure a number of setbacks, including the shutdown of its movie and book services by authorities.

'Confidence in China'

Apple CEO Tim Cook is expected to travel to Beijing later this month to lobby senior leaders on the company's behalf. He told Xinhua that he remained upbeat about Apple's business in China.

"[The deal] reflects our excitement about their growing business ... and also our continued confidence in the long term in China's economy," Cook said.

One area of cooperation the companies are likely to explore is mobile payments. Apple Pay was recently launched in China but has to compete against well-established existing competitors owned by Alibaba and Tencent.

Didi's database of more than 300 million passengers would provide an opportunity for Apple Pay to expand. However, despite the service's growing popularity, it is still technically illegal in China for private cars to offer rides for payment and authorities occasionally arrest drivers.

uhe/kd (Reuters, AFP)