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Why did Apple just invest $1 billion in this obscure Chinese company?

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David Cornish
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What would you do with (Doctor Evil voice engaged) $1 billion?

While it's a question we'll only ever get to ponder over a tepid pint and packet of pork scratchings, it's one that Apple has to consider on a weekly basis.

It made $53 billion in net profits last year - more than a billion a week - but following a drop in smartphone sales linked to its struggles to dominate the Chinese market, the Californian tech giant is reconsidering its approach to the Eastern world. So it's sunk $1 billion in Didi Chuxing.

Who? China's answer to Uber (another Western company that failed to gain a foothold in the nation), Didi Chuxing is a taxi disruptor worth around $25 billion - but it's not just the cash that Apple is interested in.

Well, okay, it's mainly the cash, but according to CEO Tim Cook, it's the perfect opportunity for Apple to understand the mysterious ways of Chinese business - a communist world that doesn't really give a damn about intellectual property, in which copying a successful product is actually a good thing. "We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," Cook told Reuters. "Of course, we believe it will deliver a strong return for our invested capital over time as well." 

It also gives Apple a valuable insight into car management: completing some 11 million rides a day it could give Apple access to the huge volume of passenger behaviour data that accompanies China's largest ride hailing service. It's data that could be invaluable for Apple's self-driving car ambitions, an avenue which the company is looking to grow in the very near future.

"(The deal) reflects our excitement about their growing business... and also our continued confidence in the long term in China’s economy," said Cook, whilst throwing piles of money at the other Apple execs and laughing at the poor Chinese workforce on its iPhone production line.

Probably. 

[Via: Reuters]

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David Cornish

Shortlist.com’s esteemed Tech Editor. David has a keen interest in video games, Star Wars and stuff that runs on batteries.

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