BEIJING: Apple, the US technology giant, is investing $1bn in Didi Chuxing, China's top ride-hailing app which is seen as a major rival to the better-known Uber app.
"We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," said Apple CEO Tim Cook in an interview with Reuters. "Of course, we believe it will deliver a strong return for our invested capital as well," he added.
Didi Chuxing, formerly known as Didi Kuaidi, is the largest ride-hailing app in China with 87% of the market and the start-up claims that it completes more than 11m rides a day.
Although Apple's investment is relatively small when set against its substantial reserves, the move has intrigued analysts because it shows its interest in two growing areas of technology – the sharing economy and car technology.
And even though China is on course to become Apple's largest market for its iPhone, sales are beginning to level off, so Apple's rare investment has also given a glimpse into some of its thinking about how to diversify its business.
"This investment shows they are thinking not just about cars but business models around transportation, and that is a very encouraging and interesting sign," said Bob O'Donnell, an analyst at TECHnalysis Research.
Meanwhile, Ben Bajarin, an analyst with Creative Strategies, suggested Apple's move may also be about shoring up its relationship with the Chinese authorities.
"This is as much about sending signals about their seriousness in that country as it is about helping Didi build a ride-sharing platform," he said.
The news coincided with a report from Bloomberg, which said the Asia-Pacific region accounts for just under a third of Apple's revenue.
The report also stated that China was the most promising consumer market in Asia in 2015 and that the country probably will remain so over the next four years.
Data sourced from Reuters, Xinhua; additional content by Warc staff