Why Apple Just Invested $1 Billion In Uber's Largest Chinese Rival

Godzilla versus Mothra? As the tech world narrows, with a few mega-companies dominating digital commerce, they are increasingly getting into each other's businesses - an in each other's strategic face.

That is why Amazon is taking on Netflix and, as the following article explains, why Apple is investing in Didi, the Uber rival, which just happens to have two of China's biggest internet companies - Alibaba and Tencent - as investors.

In this world, everyone has to pick sides - and the strongest network will will. JL

Davey Alba reports in Wired:

Apple joins Chinese internet companies, Alibaba and Tencent, in backing Didi—an alliance that Apple may be thinking makes good strategic sense, especially as the Chinese market for smartphones—and the smartphone market on the whole—continues to slow down. (Apple) may be jumpstart(ing) its expansion into other businesses, particularly the Apple Car. Didi is part of a global ride-hailing alliance that includes Lyft, India’s Ola, and Southeast Asia’s Grab.
Apple has bet $1 billion on Didi, China’s biggest ride-hailing service and the most daunting threat to Uber’s ambitions in the country.
The investment announced today is the single largest 4-year-old Didi has received so far in its short history, giving it a major boost in the fierce battle to become the way Chinese consumers get around. Yes, Uber still has a higher valuation on paper than Didi—$62.5 billion versus $25 billion—and Uber is in more countries globally. But China is the world’s most fertile market for on-demand transportation, a nation with 750 million potential riders and huge runway for growth as potentially hundreds of millions more Chinese enter the middle class over the next decade. Even with Uber coming in second place in China, five of its 10 top cities by ride volume are in the country. Didi, meanwhile, said it was operating in more than 400 cities as of January, and it has captured 87 percent of the private ride-hailing market, according to analysts.
In a statement, Apple said the investment would go towards helping Didi further build out a rideshare platform that already handles 11 million daily rides for 300 million users across China. “Didi exemplifies the innovation taking place in the iOS developer community in China,” said Apple CEO Tim Cook. “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.”
The investment also underscores Apple’s efforts to have a stronger presence in its own largest market outside of the US. Crucially, Apple joins two major Chinese internet companies, Alibaba and Tencent, in backing Didi—an alliance that Apple may be thinking makes good strategic sense, especially as the Chinese market for smartphones—and the smartphone market on the whole—continues to slow down. The alliance fuels the theory that the tech device maker may be trying to jumpstart its expansion into other businesses, particularly the much-ballyhooed Apple Car. And though $1 billion sounds like an enormous amount of money, it’s less than half-a-percent of Apple’s $233 billion cash hoard.
The deal also gains Apple some allies in other parts of the world. Didi, it’s worth noting, is part of a global ride-hailing alliance that includes the San Francisco-based Lyft, India’s Ola, and Southeast Asia’s Grab. As it’s faced growing doubts from shareholders about the strength of its core business, Apple seems to be saying it doesn’t have to limit its ambitions to selling devices alone. Maybe, just maybe, there’s money to be made in what people do with them.