Apple’s investment in Didi points towards its tacit future goals

|May 13, 2016 0

China based company, Didi Chuxing today announced a $1 billion investment from Apple. Didi is the China’s version of Uber, but much larger than the latter. The company has 300 million customers in 400 cities, and claims to hold over 87 percent market share in private car-hailing and over 99 percent market share in taxi-hailing.

Apple’s investment in the ride-hailing app comes as a bit of surprise, as it is a clear diversion from Apple’s history of investment and acquisitions so far.

Explaining the reasons behind the investment, Apple CEO Tim Cook told Reuters,”We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market. Of course, we believe it will deliver a strong return for our invested capital over time as well.”

                                 

___________________________________________________________________________________________________________

Meanwhile, China is Apple’s second-largest market, but its growth prospect in the country is diminishing fast due to slow sales growth as well as regulatory pressure from the government. 

This could be a goodwill gesture to mend ways with the authorities and highlight Apple’s commitment to China market, where the government has banned its iBook’s and iTunes services.

It is high also time for Apple to invest some of its $200 Billion cash and bonds in future revenue growth geographies like India and China. So, we might see more such strategic investments from Apple going forward.

On the other hand, the investment is also feeding the speculation on Apple’s plan for self-driving cars and hence is being seen as a strategic investments in that regard. Apple has tried to keep the plan under wraps so far, and it is so obvious that even Tesla chief, Elon Musk didn’t mince his words when he told BBC, “It is an open secret that Apple is making a rival electric car.”

It also points towards Apple’s interest in growing the services business and building a complete ecosystem play around its existing business of smartphones.

Considering all these aspects, it seems to be more foresighted investment in 14 million driver network and 300 million plus user base of Didi- who could be the target customers for iOS ecosystem including devices, Apple Pay and even may be towards its future dream of Apple Car.

No Comments so fars

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.