Apple has invested $1 billion in Didi.
Now, before you start making any lame sister jokes — or worse, Mamata Banerjee jokes — let us clarify something – ‘Didi’ here does not refer to the Indian elder sister. Didi is short for Didi Chuxing, which happens to be China’s largest app-based taxi/cab service.
In simple words, Didi is to China what Ola is to us. Except that Didi has a far greater market share. Currently, Didi monopolizes the Chinese cab-share market at 87%, registering an unbelievable 11 million rides a day!
So why did Apple invest in Didi?
In a statement to Reuters, Tim Cook said: “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.”
Cook has denied that the investment has any direct connection with Apple’s plans for making a car. He said Apple is currently focused on learning the “in-car” behaviour of passengers.
However, he did agree that in the long run, their findings may influence the design or functioning of Apple Car, that is, if Apple decides to make a car.
So sly, Mr. Cook, so very sly!
However, Tim Cook’s elation aside, Ford seems to think that this is “Apple’s Worst Decision in China”. Didi is facing stiff competition from Uber and has already lost billions in this war. Uber Technology, on the other hand, is operating in 45 cities currently and expecting to cover more ground by year, by which time they should have reached out to 100 cities.
Both Didi and Uber are offering heavily subsidized rates and bearing huge losses. They need cash, and they need it now. And although Didi has raised a lot of money in multiple rounds of funding, Apple’s investment has been their single largest cash inflow in history.
Naturally, Tim Cook was all praises for the company. “Didi exemplifies the innovation taking place in the iOS developer community in China,” he said. “We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting them as they grow.”
But how does it affect us, the Indian readers?
It’s interesting to note that Didi is part of a global alliance of cab-share services that include USA’s Lyft, East Asia’s Grab and our very own Ola!
So, if Apple thinks that investing in the cab-sharing model is a good way to enhance its hold on an economy, we hope it turns its attention to India as well. They recently suffered a major setback when the Indian government denied their request to import refurbished iPhones. This just might be the market strategy they need to improve their presence in India. As for us, the only thing we can think about is won’t it be a hoot to have Apple sponsored Ola cabs here!