Apple has announced a $1 billion investment in Chinese ride-hailing service Didi Chuxing, heightening speculation that the tech giant is developing a self-driving car.
The investment in China’s Uber is Apple’s largest since it acquired Beats Electronics in 2014. China has been the company’s main engine of growth in the past few years, providing $59 billion in revenue in 2015.
“We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” Apple CEO Tim Cook told Reuters.
But the move also gives Apple a stake in the sharing economy and car technology as its iPhone business matures. “Bottom line: Apple won’t be able to stay coy on its car project for much longer,” Business Insider said.
“Apple’s car is probably electric, and probably self-driving as well,” it speculated. “Is there a chance that Didi Chuxing could be the first major customer for the Apple Car or iCar when it potentially ships in a few years?”
Didi Chuxing claims to have more than 87% of the market for private car-hailing in China but according to Reuters, it “has been losing billions in a costly battle with Uber for market share in China.” Apple’s investment is the largest it has ever received.
Patrick Moorhead, an analyst at Moor Insights & Strategy, said Apple is diversifying its business as sales of the iPhone level off, and the firm’s investment in Didi complements its services such as Apple Music and mobile payment Apple Pay.
“After all the hints about the service business and what they would like to do in the future, it’s all starting to fit together,” he said.
Cook said the company remains focused on the in-car experience with its CarPlay system, which links smartphones to vehicle infotainment systems. “That is what we do today in the car business, so we will have to see what the future holds,” he said.
“What this means to me is that Apple is firmly committed to the Chinese market,” Brian Blau, an analyst with the Gartner research firm, told The New York Times. “They are going to look at lots of opportunities.”