Apple Invests $1 Billion in Chinese Ride-Sharing Company Didi Chuxing

[peterdevries]

The idea of Apple entering the automotive industry is unfathomably stupid. It's as if Nissan decided to build a smartphone. It's just dumb.

The automotive industry is an entirely different ballgame from the tech industry. Apple is gonna learn that the hard way it seems.

First off, I'm not saying Apple is well positioned to enter the car production market, however I do disagree with you about what you are saying here. 10 years ago you would have been absolutely right, but the car market is changing and currently being disrupted by new entrants such as Tesla. These are technology oriented rather than manufacturing and supply chain oriented players such as the traditional car makers. Why is that?

With the car industry becoming more and more a contract manufacturing industry, it is easier for independents such as Tesla or Apple to design their new car and contract the manufacturing out. That is good, because it is decreasing the controlling power of the big players and making it easier to become profitable at a lower rate of sales than historically where you needed globally about 10 million sold cars in order to be a bit profitable.

So, the field has changed. A new entrant needs to produce far less cars in order to be profitable AND the importance of self-owned ultra efficient just in time production lines is reduced immensely. Combine this with the increased simplicity of the new electric cars and I think the old players need to be very wary of what is coming for them.

"the car is a different ballgame" is only true for combustion engines and self-owned production lines.

 

[djcerla]

Why doesn't Apple invest in American companies?

Because they do. Apple buys a company a week, many of them are from the US.

 

[Dr.Chroma]

Donald Trump will have a field day when he hears this. He already was Anti-Apple to begin with.

 

[djcerla]

Is this essentially a bribe to Chinese regulators? That is, look, we're invested in Chinese companies, let us play in this market?

Yeah! Let's just flush away one billion into a random Chinese company, so they'll give us back Books and Movies stores! Probably, Tim Cook opened the Yellow Pages at random to pick the lucky company.

 

[paul4339]

Nice move by Apple it will allow them understand the Chinese transportation market better and possibly form a strategic alliance with Didi.

Didi already stated that it's next big challenge is to work on an 'intelligent network' to forecast and meet real-time consumer transportation demand... And just as important it's working with the Chinese government to help with it's transportation problems (Didi does shuttles/buses, car pooling as well as taxi), so basically it will have regulatory 'green card' to innovative things with less intervention.

 

[djcerla]

The idea of Apple entering the automotive industry is unfathomably stupid. It's as if Nissan decided to build a smartphone. It's just dumb.

The automotive industry is an entirely different ballgame from the tech industry. Apple is gonna learn that the hard way it seems.

Apple really is just a rudderless ship now, they essentially just do whatever sounds good to the cloned MBA's in a boardroom. Buying up Beats, Apple Music, selling 16GB iPhones in the year 2016....they really are shooting themselves in the foot.

No wonder AAPL has taken such a dive, I'm surprised they lasted as long as it did

Yeah! Let's just focus on Apple's own: personal computers! I suggest a beige hue for the new machines.

 

[dan110]

Another bad investment away from its core.

 

[Carlanga]

Apple 2017
Designed in China, Made in China.

 

[Dr.Chroma]

There is no doubt there is a method to his madness. And yup, it's madness. It's hard to see what his payoff is at this point. To early.

 

[sudo1996]

Apple invested in an "Uber competitor" (aka knockoff with no new tech)... Maybe it'll work, but that's going to look bad for their image.

 

[iZac]

In unrelated news, Apples iBooks and Movie Store sales resume in the Middle Kingdom.

Personally I hate Didi because it's just the regular filthy Santanas. But at least since they're normal taxis the drivers actually know the city. I used to use Uber but the drivers now are all idiots who don't know the city. It's now been monetised by a private company that sends fleets of white BYDs out into the wild. Ordering a taxi with either is a nightmare for ignorant laowai like me because they never even look at the map, they call you to ask where you are. No taxi driver understands my merger Chinese as I tryto hold their hand to get to my location so it ends up being stressful for everyone.

 

[sudo1996]

Donald Trump will have a field day when he hears this. He already was Anti-Apple to begin with.

Yeah, I'll be surprised if he doesn't say something about this.

 

[paul4339]

Yeah! Let's just flush away one billion into a random Chinese company...

it's funny if Apple invested this kind of money on Uber it would probably receive a different reaction.

Yet, Didi which serves more than *5 times* the rides as Uber (global) daily and has 14 million drivers (Uber has less than 400k drivers), gets labelled as a "random" Chinese company... and Apple investment in Didi is labeled as "flushed" away.

Just because the company is not from the US/Europe or seems foreign or we haven't heard of them before doesn't mean it's random or trivial.

.

 

[SHNXX]

Well, for those of you who may not be aware, this company is essentially Uber of China (Uber in China is also Uber of China, I guess) and has raised 4.42B dollars and is backed by Alibaba and Tencent among others.

But admittedly, the idea that Apple is all of a sudden making venture capital investments in China, of all places, along with the timing all seem a little weird.

 

[5105973]

I'm more than a little uncomfortable that a company that brags so much on its progressive views is so tied to a country that is known for oppression and human rights violations. For crying out loud Tim Cook signed his name to that open letter protesting the so-called bathroom bill in North Carolina, which when you come down to it, though important and historically significant, is not on the same scale as a Tiannamen Square in seriousness and consequence. Yet he's pulling out all the stops to court a country whose government massacred and executed protestors to its oppressive regime and censors free speech and its press.

 

[Col4bin]

This is an example of why Apple's here to stay for the long haul. Even when they jump in bed with Communist China, buying the country's acceptance, Apple devotees cheer them on.

Few if any Millennials care, or even know what communism is.

Unable to comprehend, too complacent to educate themselves, too deep in a life of entitlements, they'll never know the difference until it's too late. If they're ever hit by the slap of reality, it's going to be the biggest wake up call of their lives.

Millennials are too busy "feeling the Bern" while checking Snapchat.

 

[PizzaBoxStyle]

This is an example of why Apple's here to stay for the long haul. Even when they jump in bed with Communist China, buying the country's acceptance, Apple devotees cheer them on.

Few if any Millennials care, or even know what communism is.

Unable to comprehend, too complacent to educate themselves, too deep in a life of entitlements, they'll never know the difference until it's too late. If they're ever hit by the slap of reality, it's going to be the biggest wake up call of their lives.

'scuse you!?

I guarantee that Millennials at-large know what communism is (all to varying degrees, to be sure). Unless one flunked their American History class in high school. Even so, I don't think it's a question of whether Millennials know what communism is, what you are talking about is more of an issue of, we don't have control to do anything about the behavior of the largest company in the world.

What are you? A burned out boomer, or shop worn gen-x? (generalizations are fun...)

 

[DaveP]

I'm more than a little uncomfortable that a company that brags so much on its progressive views is so tied to a country that is known for oppression and human rights violations. For crying out loud Tim Cook signed his name to that open letter protesting the so-called bathroom bill in North Carolina, which when you come down to it, though important and historically significant, is not on the same scale as a Tiannamen Square in seriousness and consequence. Yet he's pulling out all the stops to court a country whose government massacred and executed protestors to its oppressive regime and censors free speech and its press.

Yep, it's sad really and not unusual at all. You saw companies boycotting places with laws against same sex marriage and then building a factory in a place where being gay results in imprisonment. Or celebrities ranting about bigots who don't like certain aspects of homosexuality and then go vacation in place where you can be put to death for being gay. I realize these places are very foreign in a lot of respects, but it puts getting offended over a cake in perspective. In a lot of places, things are way worse.

 

[patent10021]

They say it's maybe to do with electric cars but I can't help it think that this is also related to Apple Pay. Uber will never be or beat Didi in China and everything is paid with WeChat and Apple Pay will probably end up being integrated into WeChat.

 

[citysnaps]

Yeah! Let's just flush away one billion into a random Chinese company, so they'll give us back Books and Movies stores! Probably, Tim Cook opened the Yellow Pages at random to pick the lucky company.

Do you honestly believe that?

Spend a few minutes and think a little deeper, and I'm sure the answer will come to you as it has for others. Hint: Think about the business (and its market share) Apple invested in, the technology Apple is "secretly" developing, and the opportunities/population in that country.

 

[paul4339]

Interesting that civilian ownership of cars in China is currently about 160 million, with roughly 260 million drivers. And Didi works with 14 million of those drivers.

You want better mapping and traffic info?

 

[macchelsea]

how is investing money in a company helps you understand Chinese Market (a company they have no controlling ability in)?? it's like me saying I saw Brazil soccer match and it helps me understand Brazilian politics better.

Whatever you are smoking Cook, stop it

To learn that to do business in China you must accept being coerced by the Chinese government into making illogical and irrelevant investments. Remember just a few days ago Apple lost the right to the use of the trademark "iPhone" by a court ruling? That's a blackmail to say the least.

 

[Shirasaki]

Didi Chuxing! Sounds like a cash register ringing up the sales.

ChuXING!

Good one, Tim.

Well, I didn't get the point.

 

[John Mcgregor]

A serious wtf moment.

 

[DUCKofD3ATH]

Well, I didn't get the point.

Give me a bit more to work with. Are you saying you didn't understand my post? Or why Apple bought ChuXING!?
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Is this essentially a bribe to Chinese regulators? That is, look, we're invested in Chinese companies, let us play in this market?

Doubt that it's a bribe. Think about it. California just outlawed self-driving cars, so how long will it be until other states do likewise?

On the other hand: China May Become World Leader In Self-Driving Car Industry.

Apple's working on an electric car. Maybe it'll be a self driving model ready in time for those 75% of the Chinese who say they'll ride in a self-driving car by 2020. 75% of China's population is 1 billion people.

That's a lot of self-driving cars.

Go Apple!