Apple invests $1B in Chinese ride-hailing service Didi Chuxing | Hacker News Reader

Apple invests $1B in Chinese ride-hailing service Didi Chuxing

reuters.com

300 pointsssclafani126 comments

There were a few ideas floating around Chinese tech blogs, of the most possible reasons are:

1. Integrate Apple Pay into Didi Chuxing apps, which is estimated to have 300MM users in China[1]. Didi currently only accepts payment with Weixin(aka WeChat) Pay and Ali Pay (aka Ant Financial Services Group, owned by Alibaba Group).

2. Massive data points for developing Apple's self-driving technology. Didi operates in 400 Chinese cities with over 11 million rides per day, and accounts for 80% private car hailing market and 99% taxi hailing market.[2]

3. And yes, investing into Chinese tech sector give them a better leverage in negotiations with the government and also like sbuccini said, association with other Didi's major investors.

[1]: http://www.theverge.com/2016/5/12/11669178/apple-invests-1-b...

[2]: https://en.wikipedia.org/wiki/Didi_Chuxing

For the second point, i wonder if there is any potential restriction on transferring this kind of data to US ...

The juxtaposition of this possible use of data by Apple (as an investor) with Chinese state-sponsored large-scale theft of technical data by security breach is wonderful.

I assume that this acquisition would also be a natural consumer of any future car technology developed by Apple

Apple didn't acquire they company, they invested in it; Didi valuation is in the 10s of billions, besides, buying them out right would have less value to Apple.

Don't forget that not only is the chinese market huge, and one of the few where there's limited competition from other western companies, it's greatly positioned for the needs of rising economies. Especially if IOT takes off. If you have just become middle class in africa, asia or india you're going to buy bang-for-buck chinese appliances. That, while the west as arguing about standard and market capture, are all going to (might, at least) be fitted with cheap wifi chips in a few years.

Dependable analysis.

Agree with all 3. Just think the ordering would be from 3 to 1. And not just massive data points but an actual big built in customer for your self driving vehicles.

1. Maybe partly, but 1B USD seems a lot to pay for that.

2. Self-driving is not going to happen in China the way it happens in the US. The roads are full of pedestrians, e-bikes, people breaking any sort of nominal rule or law... it's too accident prone. Plus you have the extra challenges of the politically accuracy-challenged navigation systems. No, I don't think this reason floats.

3. Maybe partly. Locking down stable long term CNY income via a one time USD investment seems like it could even be seen as long term corporate tax planning.

Re: 2;

Perhaps Apple is thinking that this is the hard part. Nailing down the most difficult areas of self driving cars will both give them the market in China/India or other areas with similar traffic, and also leaving the "easy stuff" for last, which will only need to be supplemental.

#2 sounds like San Francisco ...

You need to drive outside of the US. Try New Dehli.

SF is busy, has tourists, and asshole taxis, but is just a normal city.

Delhi has 6 lanes if fluid traffic that mixes like a stream, cows walking the wrong way, elephants, tuk tuks that have heard of this thing you call lanes and find it a silly idea, and pedestrians that show no fear and believe they are made of iron.

China can be very similar.

China traffic (even Beijing or such) is absolutely crazy compared to anywhere in the US, and I hear that India is an order of magnitude crazier.

It's not even really comparable. Anywhere in the US you at least have lanes of traffic, people driving on the right side of the road, and don't have a gazillion 1930s-looking tricycle carts weaving in and out everywhere... Scariest part to me about China traffic, everyone covers up their seatbelts so you can't use them.

Driving in China is absolutely not comparable to driving in India

Is rule of law in traffic important for self-driving cars? If self-driving cars are based on neural networks rather than on rule-based systems, do we have any kind of intuition about under what kinds of traffic circumstances they will do well?

I would imagine a (truly) self driving car wound not assert itself aggressively - but carefully - in a crowded square and would therefore not make any progress at all. A steady stream of pedestrians jay-walking, knowing that they had nothing to fear. (Or at least, believing they had nothing to fear.)

See this gif: https://i.imgur.com/loW46yj.gif

Humans have the luxury of being able to charge into an uncontrolled intersection and trusting other drivers to make room. Sure 1% of the time it's going to cause a fender-bender, but that's just what you have to do in order to get through the intersection.

There's no way that taking chances like that would fly with a self-driving car. Even though the human passenger would have done the same thing, they're still going to feel like the car company owes them for "the car's mistake" when it's involved in a collision.

On what grounds do we have that trust?

You can just as easily teach a computer to trust people to make way as you can teach it to assume people won't make way.

Yes, you could. Like I said. And like I said, good luck marketing a product that drives recklessly into a busy intersection hoping that people will move.

> Maybe partly, but 1B USD seems a lot to pay for that.

Apple has at least $216B cash on hand as of 2016 [1] and majority of them are held overseas. $1B strategic investment with all said benefits sound like a VERY GOOD deal.

> Self-driving is not going to happen in China the way it happens in the US. The roads are full of pedestrians, e-bikes, people breaking any sort of nominal rule or law... it's too accident prone.

Probably not for a long time, yes. But I would argue that's exactly why Didi's data is MORE valuable for autonomous driving modeling to be based off. As Elon famously said[2] to George Hotz about his comma.ai demo, 99% of the self-driving is easy to do. The hard part is the 1% edge cases and billions and billions of data points for engineering validation. Apple has a very aggressive timeline for their self-driving EV, buying that massive amount data from a harsh environment serves that purpose REALLY REALLY well and it's an efficient use of capital resources to achieve their goal in time.

> Maybe partly.

And lastly, it's hard to argue a ban on Apple when Apple can say to the government that hey we've investing $1B to grow millions of driver jobs and the local tech economy. It's about jobs!

[1]: http://www.marketwatch.com/story/apple-isnt-really-sitting-o...

[2]: https://www.teslamotors.com/support/correction-article-first...

> But I would argue that's exactly why Didi's data is MORE valuable for autonomous driving modeling to be based off.

We are assuming Didi/China will allow Apple access to the data ...

Apple has huge stores of cash sitting overseas. They can't bring it home without subject to large tax penalties. With that cash stockpile growing, it seems like they're having trouble finding ways to put that money to work overseas. I wonder if they would have still made this investment if they had the ability to bring that money back stateside without hefty tax liabilities.

Regardless, a $1B is not a small chunk of change, even for Apple. Clearly, natural synergies could arise when Project Titan matures. But Apple tightly coupling itself with a rising player in the Chinese tech sector is a smart play (not to mention associating itself with other notable Didi investors like Alibaba). We've seen similar moves by Uber, who took a large investment from Baidu.

Interesting times ahead.

Tax reform has been kicking around for years in Congress (which would allow repatriation at a lower rate) and has fairly bipartisan support. It likely won't happen in an election year, but after November I'd say the odds go up significantly. I doubt that has anything to do with this investment. They've had no problem tapping the debt markets to buyback stock and pay dividends, they don't need access to their cash.

Companies wont do it until its offered as full amnesty, especially companies as large as Apple, there is no reason for them to.

Sure there is. Apple has already accumulated a dangerous amount of debt, given their business is declining and global smartphone sales growth is inching closer to zero.

Outside of the financial sector, they're now one of the world's largest corporate carriers of debt at $69.3 billion. At the pace they're picking up debt, they'll hit $100+ billion in debt in two years, while their annual profit and stock price declines simultaneously (upsetting investors, increasing pressure for greater dividends). Given their position in the smartphone market is in no way guaranteed or a monopoly, it's an extremely dangerous position they're putting themselves into.

Apple would accept a 5% penalty on their pile of cash any day of the week to repatriate it. Their financial situation in the very near future will become such that they start to get threatened with credit downgrades as the debt piles up and their growth keeps going backwards or otherwise stagnates. What they're doing can't continue for more than a few more years before it causes serious problems.

Why will profit decline? A reduction in sales _growth_ does not mean a reduction in sales/revenue/profit.

> Apple has already accumulated a dangerous amount of debt, given their business is declining and global smartphone sales growth is inching closer to zero.

Umm, what? That is nowhere close to a dangerous amount of debt. They're issuing debt because rates are so low that it is advantageous to do so. Free cash flow can easily take care of all their expenses (including dividend).

Tax reform has been kicking around for years in Congress (which would allow repatriation at a lower rate) and has fairly bipartisan support.

Note that while tax reform has broad support from both parties, the exact details of those reforms are fairly divisive.

I'd certainly consider it a small chunk. Based on 2015 revenue, and my 2015 income, Apple spending $1B is the equivalent of me buying a MacBook. The cheapest one.

Why would you compare revenue to income?

Why wouldn't you?

What would be a better comparison?

Revenue is the money that comes in, ignoring expenses. Income is the money that comes in, ignoring expenses. They are exactly equivalent.

In the context of discussing a company's finances, income is usually short for net income, which is also known as earnings or profit, or revenue minus expenses.

In this case, they're comparing a company's revenue to a person's income, so "income" as applies to a company's finances is irrelevant.

At 234B apples 2015 revenue is 234x this investment. The cheapest macbbok air is 899 which would put your income at 210k !? not bad, who do you work for ? :)

I see this argument a lot, but what do you think they would spend that money on if they could bring it back to the US tax-free? If they thought they could get a better return on it in the US than the one-time tax hit would be, then they would repatriate the funds. The fact that they don't says a lot.

the only taxable repatriation is if they sit on the money as profit. if they spend it on anything, it's deductible.

> what do you think they would spend that money on

Bringing back some of the production to the US, which will benefit everybody by getting skills that are exclusively available in Asia onto the continent where most of it originated but now has been perfected and is only available outside the US. I don't live in the US but it's worrisome that we're comfortable with the concentration of EE manufacturing skills in one particular region of the world. Other industries are not like that and have state of the art production in all places of the world.

Never happen. In the US those jobs would be done by robots, as they will shortly in China. Manufacturing jobs aren't coming back.

Even if robots do more of it, it's a win because there's no precious resource in Asia that requires fabs to sit there like say tea plantations and because better robots will allow setting up fabs in more diverse locations.

> which will benefit everybody

Everybody, besides Apple, because that means they'd pay more for the same work being done. Actually, they'd get robots to do the building.

Apple has been spending their state-side money on dividends and stock buybacks so no, they don't seem to have any big ideas for investments in the US besides their considerable R&D spending of about $10 billion this year.

I am pretty sure this has nothing to do with inversion and has a lot more to do with appeasing the Chinese government with a capital investment.

http://www.eweek.com/mobile/apples-tim-cook-heading-to-china...

Tim Cook meets with Chinese government to smooth over relations and then immediately Apple announces a capital investment in China, what a major coincidence!

Both. Apple earns a lot of money in China, so they want to be seen as doing something with that in China to look better with the government + its already been taxed there anyways.

Same with most tech companies actually, just that Apple does very little R&D in China ATM, so investment it is.

The linked article claims that Tim Cook is meeting with Chinese propaganda officials. My bet is that Apple will first manufacture and sell electric cars in Asia than bring it to the USA. If that is true the ministry of propaganda is probably frustrated with Apple's secrecy. BTW, I doubt self-driving cars are very high on Apple's list. They are a very very practical company and self driving cars have not proven themselves yet.

They should build a nice self sustaining city/island somewhere I can move too like Disney's Epcot far away from the Trumps and genpop.

If your theory is true, this is clearly a big "win" for the US government. Not only do Apple shareholders lose because Apple is forced to make suboptimal investments, but also the American economy is losing because the money is invested elsewhere. I am sure Congress is paying attention and will respond by making the US tax regime even more aggressive.

The possible swing of this investment using offshore cash > bringing reserves stateside and seeing capital gains

One has larger risk but upside.

Apple Map/Siri and Google map eventually will become the interface to ordering car sharing. Especially once there is autonomous cars and Uber or Lyft do not own the driver-side of the equation, ride sharing will become a bit like ordering rental cars from Kayak.

The same way Facebook is becoming the interface to content, both google and apple will own the consumer side of the cars and help you pick the best deal or cheapest option. It could be from Uber, a guy who owns a fleet of 20 autonomous cars or Hertz, etc.

This moves totally makes sense for Apple as they will move to own the consumer side of this market.

Also Echo / Alexa.

Why assume Facebook will remain dominant?

A lack of explicit mention is not an implication.

"The same way Facebook is becoming the interface to content"

I feel like I get all the relevant and useful content I need, while minimizing the noise, specifically because I am not using Facebook...

Are they investing in Didi the ride sharing company or investing in Didi, Uber's arch rival in China?

The chess game afoot in the autonomous vehicle battle is attracting some strange bedfellows between Apple, Google, tesla, ford, Mercedes, Uber, Lyft, Volvo, Nvidia, etc.

The end game is outrageously big, generationally big, and it's going to be a treat to watch the Titans lock horns.

It's the same company.

I believe aresant is questioning the motivation behind the investment.

That is:

- Is Apple investing in Didi in order to see a straightforward return on investment?

- Is Apple investing in Didi in order to counter Uber's global expansion, so that they can begin to control the ride-share market themselves?

Their motivation for the investment would say a lot about their intent regarding their automotive plans (Project Titan). If they are doing this simply because they have a mountain of spare change sitting around and would like to put it somewhere to see larger gains while rubbing elbows with China's establishment, it might not signal much about their automotive intent. But if they are making the investment to staunch Uber's expansion into Asia (And maybe India, given Didi's investors' related holdings) in order to secure a spot for themselves at the global table to cash in on autonomous auto service, that's a whole different ballgame.

Edit: Formatting

The question is framed to imply that they would not invest in Didi were Uber to not also be vying for power -- aka this is a swipe at Uber rather than a strategic investment in China.

The actions may be identical but the intent is different.

It'd be hilarious if we get viable telepresence before we get autonomous vehicles, and then the automobile market massively shrinks because nobody commutes to work anymore.

We already have close to perfect telepresence. Is a hologram really that much better than video? Real business will always be done face to face. When you're closing a $100m deal, you want to look the other person in the eye and shake their hand. Transportation cost is negligible at that level.

You answered your own question. Telepresence today isn't good enough to let you look the another person in the eye and shake hands. But it will be at some point.

At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it, but my personal opinion is that telepresence will never match real presence. If you're "shaking hands" with someone, the haptic feedback can never be more than a simulation. In no scenario short of teleportation will the molecules of your hand touch those of the other person's hand. If teleportation arrives, business meetings will be the last thing any car company needs to worry about.

> At some point this becomes a philosophical argument, so we can't have a very nuanced debate on it...

This sentiment saddens me. The thought that philosophy - which begins with the examination of our beliefs and personal opinions through the lens of reason - could be considered impossible to talk about with nuance seems deeply wrong to me.

If that's your experience, you've been exposed to some very wrong, or very modern, philosophers. Philosophy is just talking about being, and a conversation about simulated versus 'actual' reality is the best place for it.

For telepresence to work, you need to feel like your coworkers are in the same room, such that you think nothing about turning around to them and asking them a question. Video doesn't do this; something about the screen makes you feel like you need to present a performance, and that destroys the spontaneity that builds trust in person-to-person interactions.

Will a hologram do it? I don't know; real-time holography isn't good enough to evaluate it. Would VR/AR, ocular implants, direct brain stimulation, just a giant wraparound screen, whatever? Also don't know.

I do know that given the choice between having a car drive me to work for a half hour vs. being able to conduct business with anyone in the world without leaving my house, I'd much rather have the latter.

VR is already really, really close. I've had a quite a few conversations in VR that featured spatial audio and a sufficient representation of head, hand and sometimes even finger movements. It's not quite there yet because resolution and comfort are not great and because there is no facial expression capture or eye tracking yet, but I see those things solved and mass-market ready in the next 5-10 years.

With mass-market AR rolling around the same time frame (imho), telepresence that is actually wide-spread and disruptive will be here sooner than later.

How do you see the other persons face/eyes if they are covered with the VR headset?

You get to see their fun avatar! That will never get old.

If technology comes far enough that telepresence is preferred to on-site, I think it would be pretty trivial to replace the headset with whatever is behind them in VR

Eye tracking technology already exists and it's pretty likely to make it into the next generation of HMDs (think small IR camera inside the headset recording your eyeballs). Facial expression tracking is doable as well: https://www.technologyreview.com/s/537566/oculus-rift-hack-t...

Veering a little, but important.

VR is going to be a thing. And it will have a big impact on property prices: No need to go to the office. The manager will be able to walk around a virtual office as they like (perhaps in 'mute' mode where you don't see or hear them!). Collaboration will happen across distributed teams as it has never happened before.

Forget living close to work. Live somewhere you like will be the theme of choosing a property over the coming 2 decades. Long 'nice' locations on a hill, next to the sea, etc. Short 'necessary' locations near a commercial center.

> The manager will be able to walk around a virtual office as they like (perhaps in 'mute' mode where you don't see or hear them!)

Nothing like working in a panopticon [1]!

[1] https://en.wikipedia.org/wiki/Panopticon

Sure there's some really good telepresence - that enables eye to eye contact and full body language - and it creates better trust than regular telepresence(according to research).

The missing piece is having it everywhere. Also maybe the issue of group telepresence at the home.

But even with that, it's still issues of culture and politics and power etc - why would venture capitalists want every startup to be remote ? why would big companies ? Is there difference in the cultures between such companies ?

> But even with that, it's still issues of culture and politics and power etc - why would venture capitalists want every startup to be remote ? why would big companies ? Is there difference in the cultures between such companies ?

Saving costs for one thing. Office space is expensive, even more so in areas like the Bay Area. Add to that the cost for stressed or even burned-out employees and the macroeconomic costs caused by traffic and you have quite an incentive for using telepresence instead of having people commute to their place of work every day.

The question is when this incentive will outweigh the incentive for keeping people in an office. Today, there's really no good reason for the latter other than office politics and power play.

Meeting face to face from time to time certainly is important but why not mix those two options? Why not make remote work the default case and only have people meet in person when it's really necessary (this would have the additional benefit of doing away with useless meetings)?

People who close $100m deals are smart enough to not worry about "look the other person in the eye and shake their hand".

you would hope they are 'smart enough' however every time I have the opportunity meet someone or observe people at that level I am constantly shocked at their mediocrity.

Apple didn't do this because they are building a "self driving car" that they are going to sell.

Apple wants to get ibooks and movies selling in china again, it is vital to apples car strategy. This move will give them some leverage with china in getting those markets back to being active.

If you know anything about Tim Cook, you know that he is master of the supply chain. I don't think that someone like that is going to jump into apple building its own car.

So if apple isn't going to build a car, what ARE they doing with all these people on the pay roll who have worked with cars.

Its simple, apple wants to own the dashboard of the car, were not talking about "carplay" were talking about the WHOLE dashboard. Once you own the dashboard, your hooked into location, and destination (apple owns a mapping solution) they can leave it to vendors of vehicles to do the "self driving" compontent.

Why would any automaker want apple in the dashboard? Why would apple want the dashboard? Its simple, entertainment! Apple with the beats acquisition owns something that looks like radio, and music has always been there with iTunes. There is no reason you can't rent movies and books into the back seat as well.

In 3-5+ years, will we be looking at dashboards or head-mounted displays?

I don't think it matters if it is a screen on the dash or one you wear. If it is deeply integrated with your car, it has access to a lot more power, cooling and storage than anything mobile.

My laptop has loads of storage, but at home I look at my phone or TV - both streaming all their content. A car dashboard, even futuristic, is fairly limited in size unless the entire windscreen is a display, you're sitting in the front seats, and both of you are happy to look at the same thing...

I might be mistaken but it is my understanding that in China, the business model is different : the mobile operators, eg the PTTs, and not the tech companies are the ones that capture the revenue. For example, if I buy a piece of content on my mobile phone, such as the next page or chapter in the story I'm reading, Apple would not see that revenue but the mobile operators would (and others in that value chain, but not necessarily Apple ). If someone can shed more light on the current mobile content business model and value chain in China, feel free to chime in.

Mobile operator does not capture anything from the iOS Eco-system, ust like in the US. Since all mobile operators are state owned, I suspect this arrangement created a sore point between the Chinese government and Apple.

No.

The Apple Car in the suburban garages is the worst kept secret in Sunnyvale.

The same place where Mercedes R&D resides.

An electric car is just an iphone on wheels.

It must be nice to have so much cash that a $1B stake can be seen as somewhat speculative. Incredible really.

This is about gathering real world data to further autonomous driving.

Google has their small fleet collecting data; Tesla has tons of vehicles now collecting data; Uber has the potential to start collecting data. Apple has no ability to collect real world data... Until now?? Smart move Apple

Does "investing" in a company imply access to their data?

If the deal terms stipulate it does then there is nothing implicit about it. If the data was Apple's motivation for this deal, or even an upside if not their primary motivation, I'm sure it'd be explicitly stated in an agreement that they get access to this data, yes.

I agree that this is one of the reasons Apple is investing, but Apple is already collecting street-level data: https://9to5mac.files.wordpress.com/2015/07/apple-maps-van-0...

Maybe we'll see a 3d street view with iOS 10.

I hardly doubt this money is for real investment most probably just to please to government, this 1B is eventually will be distributed among citizens without a job. Also the big cities became super crowded as being extremly urbanized. In some days traffic jams starts at 3 and between 5-7 everything is just stuck. It might be also a way how goverment try to slightly reduce these issues.

Didi is a private company already worth billions. This isn't money to the government at all. So I don't see how it will be distributed to the unemployed.

If they want to please the government they'd just pay more local tax.

You clearly don't know how business operates in China. China doesn't care about tax revenue or deficits, they want capital investment and capital expenditures (especially in light of recent record capital outflows.) They have strict capital flows for a reason.

In China there isn't really a private/public divide like the U.S., bribing and knowing people in government is absolutely essential in China. Sure, it helps in the U.S. (and every other country), but it's not essential. China is a different beast. Doing business in mainland China is quite the experience, I know of no one who actually likes doing it. The Chinese are still communists after all, and if you have a supplier there...they are not loyal. They will knock your stuff off in a heart beat as soon as you leave.

Well I actually know people who like doing business in China, namely my parents, who own a medium sized tech company there.

There absolutely still is a difference between private and state-owned companies. There are even cases where Huawei loses government contracts to Cisco. Like you said, the water is murky in China, and the favor of Chinese government cannot just be bought by a tiny investment such as this.

There is no guarantee that just because you are a Chinese company, the government will be on your good side. At one point Alipay was almost banned due to some central bank regulation. Didi also has a competitor named Kuaidi, which for all we know can have even deeper connections with the CPC.

Didi acquired Kuaidi some time ago. Changed the name to Didi Kuaidi. Name changed again a little while ago to Didi Chuxing.

To me, this deal is about "You can sell XXX, if you do YYY" YYY may be investment, technology transfer, many things. But a lot of China deals and inward investment in R&D, Operations or Technology are in fact driven by sales. "We need to sell this, and in order to do so, we've been told we also need to YYY."

I suspect the same

Why they win, we dont know, but the government ask for gifts time-to-time: http://www.bloomberg.com/news/articles/2015-06-17/cisco-to-i... there are similar stories for Microsoft etc, but even Morgan Stanley almost went to bankruptcy in 2008 but in 2009 jan, fully pledges itself to help to build one of the department for Beijing children hospital till its estimated finish date 2011?

Or maybe Didi is a worthwhile investment.

You need to answer your own question, that is even if Apple's intention is to please government, why would they choose to invest in a ride-sharing company? Why not choose to build a completely isolated iBooks/iTunes store and grant government free access for censorship, that won't cost 1 billion.

There is already players offering that for free with stolen content. No good comming out from joining that game. Here they were probably asked to invest a considerable amount of money to generate jobs. Like recently there are police in every corner in Shanghai to officially fight against the bar parking practice e.g. parking everywhere. But what is more likely that the sh government was asked to create X new jobs. Apple is not the first one that was asked to contribute back to the economy otherwise its services will be restricted.

While I do believe that they are investing in Didi with the dual intent of gaining access to their massive riding data, and position themselves as providers for future autonomous vehicles, I also believe (and I could be very wrong) that they may be funneling money through China, for their US-based facilities.

I mean, could this be related with Faraday Future? The mysterious "US-based, Chinese-backed company" that plans to invest $1B in California, "focused on the development of intelligent electric vehicles and mobility solutions" [1], that many suspected it's a front for Apple's car.

[1] https://en.wikipedia.org/wiki/Faraday_Future

I doubt it (re: Faraday) -

http://lasvegassun.com/news/2016/may/11/faraday-futures-fina...

And that is it. Owning a piece of such large Chinese company, Apple also gets a foothold into decision making in China and gets more say. Very smart.

Jobs was a different person, Tim Cook leads company differently. I really like how he plays this.

This has much more to do with Apple building a car than it does with influencing decision making in China.

You are probably right. However, by increasing their foothold in such big companies, they definitely have more say.

I think you're wrong about this.

The political good favor and potential for growth against competitors in China is a huge value. Well worth the investment.

Apple could have chosen to throw money at any of a number of Chinese companies, but they chose Didi. I think it serves more than one strategic purpose, and hints at their intentions with project Titan.

China uses soft power and regulations to hamper foreign products, especially software. This investment will put Apple in good standing with the govt and could result in an easing of restrictions on Apple's other activities.

With the scale of Chinese companies is $1b a large investment? The article says Didi has already raised several billion

How economics works ? 1B$ for an app ? Innovative Small scale business are struggling to raise a million, and blatant copy cats raising billions ? Capitalism works correctly tho, what they have earn has to give back to earn more.

It's not $1b for an app. Its for 87% of the ride sharing marketshare. They eventually want self-driving Apple cars driving people all over China (and eventually the world).

If you knew anything about China you would know this is never going to happen. No business owned by a foreign entity is allowed to thrive.

This $1B is a temporary ticket out of jail for Apple. Intel had to pay its $1.5B last year, Qualcomm didnt pay and was fined >$1B for 'abusing monopoly position'.

"No business owned by a foreign entity is allowed to thrive."

what....? Apple is thriving in China. Everyone and their mom has taken out loans to buy an IPhone. I'm not even exaggerating.

Foreign cars outsell the locals brands by a large margin

Nobody is buying these apps for the technology. It's for the market.

It's not difficult to build a ride sharing app (it's all well known technology). It's difficult to gain market share.

The app is just an interface to the service, which holds the actual value.

No, $1B for a company that works.

From the article:

> "(The deal reflects) our continued confidence in the long term in China’s economy," Cook said.

If this is not kowtowing, I don't know what is. This is very disappointing coming from a company like Apple.

I haven't been this surprised by anything Apple's done in years. If moves like this one keep happening, the next few years are going to be pretty exciting to watch.

Probably dumb hypothetical: What happens if Apple comes up with an excuse to remove Uber from the (Chinese) App Store and corresponding iPhones?

A holy shitstorm? But it won't happen. The same logic would apply to apps from other fierce competition, e.g. Google Maps and Skype. While there have been some occasional issues with upgrades being rejected, the apps have been allowed to remain on the store.

The more contentious issue is with builtin apps and platform capabilities, e.g. it's possible Apple's map could show directions and prompt a one-click Didi ride. Google already does something like that with Uber, but it could be even more tightly integrated with payments, and in a way that the platform could favour certain providers.

The Chinese government could certainly come up with an excuse to block Uber in China.

An antitrust, where Apple would lose.

"The company said it completes more than 11 million rides a day, with more than 87 percent of the market for private car-hailing in China."

If they make $1.00 for each ride, that's already more than $4 billion in revenue per year.

China is still a developing market for ride hailing/sharing. The margins aren't that good. In fact, with the amount Uber/Didi are spending on driver/rider acquisition, they're both probably bleeding cash like crazy.

I was just starting to doubt Apple, especially with their lackluster effort in artificial reality, and now I'm doing an about face.

This is an incredibly smart move and a great long term play which will bode well for Project Titan.

One thing to be sure, uber will have a hard time in China.

Is there any reason Didi Chuxing is valued higher than Uber. Uber is the innovator and present all around the world. Why is it still lower-valued than Didi?

It looks like Apple wants to get the Chinese super star startup(s) to depend more on their giant pile of oversea cash; thus to protect their brand, make their strong hold on this market which is influenced very much by the state. Look at their stock today, Google is surpassing and it has no other future rather than protecting its iPhone, iPad, Macs which are pretty much saturated.

Apple to follow in Yahoo footsteps skip 10 years this might be the most valuable part of Apple :)

Could this also be because Apple would want to test their experiments in self-driving cars?

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