Apple on Thursday that it has invested $1 billion in Chinese ride-sharing service Didi Chuxing, but CEO Tim Cook refused to elaborate on the reasoning behind the move, beyond saying that it will help the company better understand the Chinese market and “deliver a strong return” on its invested capital over the long term.
The move comes amidst slumping iPhone sales, which has driven Apple’s stock price down to $90 per share, and other struggles in China. Last month, the State Administration shut down the iBooks Store and iTunes Movie sales in the country.
“Didi provides Apple with a rich data source for its self-driving vehicle push. It also could provide benefits to Apple’s mobile ecosystem. Ride-sharing apps are closely linked to payment services, such as Apple Pay. They also can be the foundation for other mobile commerce transactions such as deliveries.”
At this point, there’s no actual confirmation that Apple is working on a self-driving car, or an electric vehicle, or both — or any at all. Still, Tim Cook hasn’t completely edged out the idea of Apple at least considering the possibility, even if he’s not going out of his way to confirm anything is actually happening at all.
Still, Didi Chuxing, which is the “Uber of China,” and Uber itself, are reportedly very interested in self-driving vehicles, for a variety of reasons including reducing the overhead to pay human drivers. In a separate report, The Information states that the CEO of Uber, Travis Kalanick, had plans to visit with Apple to talk about “future partnership opportunities.”
The Wall Street Journal wrote that Didi Chuxing is “not only an important ally in a key market, but also a rich data source for self-driving vehicles,” which is valuable to Apple amid rumors that it is developing its own electric and possibly autonomous vehicle.
Didi provides Apple with a rich data source for its self-driving vehicle push. It also could provide benefits to Apple’s mobile ecosystem. Ride-sharing apps are closely linked to payment services, such as Apple Pay. They also can be the foundation for other mobile commerce transactions such as deliveries.
The investment sets up with a potential showdown of firms aligned with Uber, which has taken investments from Alphabet Inc.’s venture capital arm and Chinese search giant Baidu. Both Alphabet and Baidu have invested heavily in autonomous driving technology.
The Information believes that Apple’s investment in Didi Chuxing isn’t necessarily about the “right now” of the company, but instead the future, and where Apple can learn about the automotive industry, self-driving cars, and, perhaps even more importantly, how Google and Apple will inevitably go head-to-head in these categories down the road:
“This deal isn’t about the Didi service today. It establishes a future alliance around tech like self-driving cars, where Apple and Google are going head-to-head. Developing autonomous vehicles is the end game for these ride sharing companies—the move that will help them mint money by cutting out the cost of drivers.”
What Apple is working on is one of the best kept secrets at this point, even as a variety of puzzle pieces seem to come together. Project Titan has already been the talking point for quite some time, with expectations that the Apple Car could launch by 2020. Apple has been on a hiring spree, too, bringing in talent from the likes of Tesla and other companies focused on the automotive industry for quite some time.