Apple's $1 Billion Investment in Didi Chuxing Aligned With Electric Vehicle Plans

Discussion in 'MacRumors.com News Discussion' started by MacRumors, May 13, 2016.

  1. MacRumors macrumors bot

    MacRumors

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    Apple announced yesterday that it has invested $1 billion in Chinese ride-sharing service Didi Chuxing, but CEO Tim Cook refused to elaborate on the reasoning behind the move, beyond saying that it will help the company better understand the Chinese market and "deliver a strong return" on its invested capital over the long term.

    Nevertheless, a pair of new reports suggest that Apple's ambitions behind its investment in the Uber rival could relate to its oft-rumored electric vehicle plans and broader push into the automotive industry.

    The Wall Street Journal wrote that Didi Chuxing is "not only an important ally in a key market, but also a rich data source for self-driving vehicles," which is valuable to Apple amid rumors that it is developing its own electric and possibly autonomous vehicle.
    The Information reported that ride-sharing services like Didi Chuxing and Uber are highly interested in self-driving vehicles, which would reduce overhead costs by eliminating the need for contracted drivers. In fact, Uber CEO Travis Kalanick was reportedly planning to meet at Apple headquarters this week to "talk about future partnership opportunities," but the status of that meeting remains unknown.
    The so-called Apple Car, allegedly known as Project Titan internally, could launch by 2020. The bulk of research and development may be centered in the Santa Clara Valley area, near Apple's existing Cupertino headquarters, led by a team that includes former Tesla, Ford, and GM employees and other automotive experts. The vehicle is expected to compete with the likes of Tesla and Google.

    Article Link: Apple's $1 Billion Investment in Didi Chuxing Aligned With Electric Vehicle Plans
     
  2. Johnny907 macrumors 6502a

    Johnny907

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    Remember after Steve was fired from Apple, they started dabbling into really weird niche products that had nothing to do with their core business and sales across the board began to tank due to lack of updates/innovation in the products that actually made money thus crippling the company revenue?
    I look at the numbers for iPhones and Mac's going down year over year, stories like this one indicating more and more capital and resources being diverted from core product R&D into this "Apple Car," and I can't help but get a chilling sense of deja vu.
     
  3. ike1707 macrumors 6502

    ike1707

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    #3
    Hello Dave, would you like to go to work now?
     
  4. miknos Suspended

    miknos

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    #4
    Seeing how popular and profitable Uber is becoming, seems like this bet by Apple is a good one.

    Knowing that Chinese copy everything, Apple is buying "Uber" for cheap in a great market.

    And if you compare to Beats, it's a bargain!
     
  5. ike1707 macrumors 6502

    ike1707

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    #5
    I am completely operational, and all my circuits are functioning perfectly, Dave.
     
  6. Chickenatr macrumors newbie

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    #6
    So that's how they're getting the telemetry for both car project and Maps, eh?
     
  7. Reds622 macrumors regular

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    #7
    Does it make it even worse that Tim Cook is trying to align and integrate the company on a substantial level with a communist government with a terrible human rights record?

    Seems to me that Tim Cook has taken for granted the market that has turned the company into what it has become, the United States, because he feels beholden to the market to keep searching for higher and higher returns. But instead of focusing on innovation through the pipeline, and continuing to focus on what has made Apple great, he's been looking for short term solutions by focusing so heavily on emerging markets. And I'm not saying that trying to capitalize on countries like China and India should not be a focus, but to do so in a way that I feel is detrimental to the long term interests of the company is short sighted and could be a costly mistake. If US consumers start to feel that Apple is prioritizing Chineze business over America interests because it is a "bigger" market with more growth potential, then they are going to start looking elsewhere. And if US consumers start to go elsewhere, then the shine of Apple begins to wear off and it could be crippling on its business worldwide. Now, obviously a worst case scenario, but I don't like the direction Cook is taking the company, and haven't for a while now (see fashion wearables, multiple color computers, low power computers, increasing share buybacks, etc.). A little worrisome.
     
  8. Jakexb macrumors 6502a

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    #8
    People said that about the iPhone. There were computers and there were phones -- and the two worlds were entirely separate. Not a core business at all.

    Apple is a company that is really good at using industrial design + engineering to create consumer products. They are trying to learn how to get better at software services. In some ways, I'd say the software services are more of a stretch for Apple than a car, which seems perfectly aligned with their strengths in industrial design, engineering, and manufacturing.
     
  9. Rogifan macrumors Core

    Rogifan

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    #9
    So what do you think Apple should be working on for the future? Smartphones and laptops are pretty mature at this point. I don't think autonomous vehicles are weird or niche. Not part of Apple's core business now but their core business is pretty mature with not a ton of growth prospects. if all Apple can ever be is a company that makes phones and laptops/desktops then I don't think the future is very bright.
     
  10. Jakexb macrumors 6502a

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  11. Reds622 macrumors regular

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    The problem I have is that Apple essentially just caved to the Chinese Government and invested in the Chinese over the American tech sector.
    --- Post Merged, May 13, 2016 ---
    Doesn't feel equivalent and/or the same to me. The direction the company is heading seems different. We didn't see those iMacs in Vogue, for example.
     
  12. John Mcgregor Suspended

    John Mcgregor

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    #12
    Do you think it's easy for Apple to navigate that nut job Communist country and its laws?
     
  13. ctyrider macrumors 6502a

    ctyrider

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    #13
    To be fair - you have no idea of Apple's reasoning behind the deal.. Or what did or didn't happen behind the scenes. So your assertion of Apple "caving in" to Chinese government is completely baseless.
     
  14. citysnaps macrumors 601

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    #14
    Hardly a cave. Just a splendid acquisition that dovetails nicely with Apple's (autonomous) car development and future plans. The company already has a commanding 87% share of the market and there are tons of people. Extraordinarily smart move.
     
  15. Rogifan macrumors Core

    Rogifan

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    #15
    Yeah I'm not a fan of that (and I still think it's more about politics than anything else) but I think Apple really is doomed if all they can ever do is make phones/tablets/laptops. People don't seem to have a problem with Amazon, Alphabet and others getting in to all kinds of things but with Apple it seems to be stay in your lane and never go outside of it.
     
  16. samcraig macrumors P6

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    #16
    A different view: http://qz.com/683727/apples-1-billion-investment-in-didi-is-really-an-investment-in-its-own-future/

    Investing in Didi is just one way the company can indicate its interests are aligned with those of Beijing. Authorities are attempting to wean the nation off of foreign technology (2020 has been set as an ambitious target date), while also empowering domestic tech companies to boost R&D. Amidst this push, Chinese authorities have indicated they consider transportation an industry of critical importance. Government documents discussing “Internet Plus”—a policy directive intended to push internet companies into businesses once dominated by the state—single out transportation as one of the key industries it hopes to see revitalized by Chinese online players. Conveniently, there is only one Chinese online player, and that’s Didi. As a result, Apple’s investment in Didi against Uber is a symbolic appeasement. It’s a bet on the government’s preferred horse, in a competition that ranks alongside Baidu’s fight with Google and Alibaba’s war with Amazon.
     
  17. Tycho24, May 13, 2016
    Last edited: May 13, 2016

    Tycho24 Suspended

    Tycho24

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    #17
    Well said sir!
    At their core Apple is a technology company.... so the question is: "where is tech going?"
    10 years ago the answer was: "increasingly mobile"- so, making the most portable notebooks, then popularizing tablets, and essentially creating the smart phone industry was the right move.
    Near term, the answer is: "wearables & home automation" and they're squarely (though the fields admittedly are in their infancy) committed in those key growth areas.
    The more future answer is: "the connected car, autonomous car, or a viable car service that eliminates the need to own a car". It sounds like they are being VERY forward thinking about this industry that almost certainly will become tech dominated in the next decade and a half.

    Edit: apologies; if I remember correctly I believe the intro should have read "well said, ma'am!" :)
     
  18. JPLC macrumors 6502

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  19. kodos macrumors 6502

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    #19
    I had every faith that if Steve Jobs wanted to pursue a car - he probably would succeed. He probably would also have known when to throw in the towel if Apple didn't produce something extraordinary.
    Do I feel the same way about Ive and Cook? No.
    However, do I feel the same way about Musk? Yes.

    I think Tesla has out-Apple'd Apple - Tesla seems to 'get it' when it comes to the kind of playbook that Apple used to have.

    Today's Apple thinks that thinner + rose gold = innovation. They really have lost it.

    Even if the Project Titan comes to fruition, they have a minimum of three years before showing us that they can innovate. In the meantime, their 'A' talent will not be focused on their core products. Worse than "Apple is doomed", will be "Apple is irrelevant". Nothing worse.

    I think Ive has checked out, and Cook is getting desperate. They can sink all the money they want into Spaceship Campus, and Project Titan.

    It will be the equivalent of the saying, "Nero fiddling while Rome burned."
     
  20. now i see it macrumors 68030

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    #20
    I woke up in the morning to my alarm on my Apple phone. Then I put on my Apple watch. Then I drove to work in my Apple car (or it drove me). Then I showed up to work at Apple. Then I had an appl for lunch while listening to Apple Music.

    Where will it end?
     
  21. Nunyabinez macrumors 68000

    Nunyabinez

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    #21
    Where do you see the numbers going down? I think you are confusing growth with volume.

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    Does that look like going down to anyone?
     
  22. Reds622 macrumors regular

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    #22
    I'm not saying that Apple should just focus on making phones and computers. They need to innovate and create new products within that space. So if they create a wearable product, well then I would hope that the focus would be on the tech thats inside, or solving a real world problem that would further emphasize the Brand as a leader for change and growth (i.e., health related), instead of focusing the product as a superficial fashion accessory. That was a mistake, IMO., anyways.
    Yes, I think it's pretty clear that China is trying to build up its own companies in its own industries. They don't want to partner with the United States, they want to take over the United States as the worlds next superpower. I think that much is clear, at this point. They are protectionist of their economy, manipulate their currency making it harder to for foreign companies to compete, have a corrupt political and legal system, and building up their military by pouring tons of resources and trying to engage in espionage of US Defense Contractors.

    US Companies ignore all of this because it is a huge market and the promise of untapped treasure and gold. A convenient way to grow and appease investors and the US Markets. These companies, in my view anyways, are short sighted in their approach and don't really have the time or energy to think about the ramifications of US long term interests by engaging in strategies that are detrimental to core US interests. All just my opinion of course. Many would disagree I'm sure.
    --- Post Merged, May 13, 2016 ---
    But is that revenue growth really the result of policies/strategies implemented by Tim Cook? iPhone was a product created under the Steve Jobs era. Future growth is really just a natural evolution of Apple creating a really great product that continues to be the market leader.

    Can't the Cook era really be described as follows: stock buybacks, implementation of a dividend, Apple music, Apple watch, iPad Pro, iPad Mini, Macbook, bigger iPhones (?).. Maybe a few more. Now, which era of the Company is more fundamentally linked to the success Apple currently has on a quarterly basis? I don't think Cook has really moved the ball all the much up the hill at this point.
     
  23. HobeSoundDarryl, May 13, 2016
    Last edited: May 13, 2016

    HobeSoundDarryl macrumors 604

    HobeSoundDarryl

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    #23
    From that description, I pictured this as the (original Total Recall) Johnny Cab Taxi on Mars...

    [​IMG]

    Remember that? And if you watch the clip and mentally change the voice to Siri...


    ...well, I'll just humbly say: relative to Project Titan, I think I've "cracked it". ;)

    And we all might get to play Ahhhhnold in about 2021 or so!
     
  24. Nunyabinez macrumors 68000

    Nunyabinez

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    #24
    Funny how you people want to have it both ways. Have you heard of the self-serving bias? That's where people take credit for their successes but blame forces outside themselves for their failures.

    Steve Jobs worshippers have a Steve-serving bias. Anything Apple does that is good is the result of things Steve put in place and everything bad is the result of Tim Cook.
     
  25. Reds622 macrumors regular

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    #25
    I was just asking a question, that you didn't really answer. Are you saying that if Jobs was still around he wouldn't have achieved the same level of growth since Cook took over? Which era of Apple is really more likely to have been the driving force in Apples current success? Is that really debatable at this point in time? Has Cook really revolutionized the company or just kept it afloat? He has made a lot of rather odd decisions since he took over, especially the "big ones." (Purchase of Beats Electronics, Apple Watch, 1 billion dollar bribe/investment in a Chinese company who is the biggest competitor to a potential US powerhouse in UBER)
     

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