Didi Chuxing president says Apple deal closed in 22 days, talks in progress in several areas

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Apple's surprise $1 billion investment in Chinese ridesharing service Didi Chuxing was forged in just 22 days, and the two companies are now in talks in several fields, a report said on Friday.




The ball began rolling during a meeting with Apple CEO Tim Cook on Apr. 20 at his company's Cupertino headquarters, Didi president Jean Liu told Bloomberg. A separate source told the site that Liu didn't intend to ask for capital at the meeting, but was instead looking to discuss the Chinese market and possibilities for cooperation.

In the wake of Apple's investment, the two firms are now in talks on cooperation in sectors including products, marketing, and technology, according to Liu.

"It feels very natural to work with Apple together because philosophically on a company level we share a lot in common," she said.

Other Bloomberg sources indicated that Apple's $1 billion influx brings the total in Didi's current round of funding to $3 billion. The company is seeking a valuation of $26 billion, which would make it the world's fourth-most valuable startup.

Apple's exact interest in Didi Chuxing -- beyond a direct return on investment -- is uncertain. Cook said that the deal was made "for a number of strategic reasons," among them "a chance to learn more about certain segments of the China market."

Apple is believed to be working on an electric car for launch in 2019 or 2020. That model, or more likely a later one, could be self-driving. A deal with Didi may be connected, whether Apple is simply looking to glean information, or angling at having its vehicles in Didi's fleet. Rival ridesharing service Uber has regularly expressed interest in switching to self-driving vehicles.
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Comments

  • Reply 1 of 41
    TempletonTempleton Posts: 84member
    Not 1 comment? This is an important event and a serious clue that Apple in electric and self driving cars for the long haul. Also will help assuage relations with Chinese Officials which is as necessary in China as it is in any other Country. Especially in the good old USA.
    califoadai46moreckbadmonk
  • Reply 2 of 41
    jjitjjit Posts: 7member
    watch this video from 43:20 : get a batter idea about Didi vs Uber vs Lyft also: http://www.recode.net/2016/5/2/11634188/global-ridehail-alliance-uber-alibaba
    clemynxbuckalecirelandmoreck
  • Reply 3 of 41
    red oakred oak Posts: 673member
    Smart, on multiple levels  
    moreck
  • Reply 4 of 41
    buckalecbuckalec Posts: 192member
    Horace at Asymco did a podcast a while back on how transportation is evolving with tech. This is an excellent move by Tim on so many levels,
    ai46moreck
  • Reply 5 of 41
    SpamSandwichSpamSandwich Posts: 31,301member
    Having a little firsthand knowledge of the depths of corruption at work in China, I may be one of the few here who views this entanglement with a politically-connected Chinese business with skepticism. In my experience, foreign money invested in unaccountable Chinese companies tends to suddenly vanish with little recourse. I see Tim's reliance on China for Apple growth as riskier and riskier. What happens when Trump becomes president and opens up a full on trade war with China? The odds that Apple will be punished increase severely.
  • Reply 6 of 41
    rogifan_newrogifan_new Posts: 4,147member
    Should we be concerned that this deal happened so quickly? A billion dollars isn't chump change.
  • Reply 7 of 41
    Having a little firsthand knowledge of the depths of corruption at work in China, I may be one of the few here who views this entanglement with a politically-connected Chinese business with skepticism. In my experience, foreign money invested in unaccountable Chinese companies tends to suddenly vanish with little recourse. I see Tim's reliance on China for Apple growth as riskier and riskier. What happens when Trump becomes president and opens up a full on trade war with China? The odds that Apple will be punished increase severely.
    When Trump is president and a trade war. Seriously? EVERY company in the USA will be dependent on the rest of the world for further growth. That's just the way it is. North America is a saturated market. Let's not make a mountain out of a mole here. Apple bought a 5% stake in a foreign company. Big deal. Other than it being a sign (similar to investment in India) that Apple has made in roads in a very protective economy. this isn't a huge risk for Apple. America will never enter a trade war with China. It would be ultimate disaster for economies world wide. And no one (not even his own advisors) would recommend it. Trump talks out of the side of his mouth to win votes. 99% of his promises cannot be met. He's an ignorant bafoon who throws comments into the wild to see how people react, retracts them when people call him out or continues to spoon feed drivel to the uneducated reactionary masses.
    cintospaxmancalibattiato1981rob53bb-15singularityfastasleeprepressthismoreck
  • Reply 8 of 41
    cintoscintos Posts: 113member
    Note to the Politicians: Apple can freely invest in China, using profits made in China from Apple products manufactured in China, without paying the US Treasury their demanded 35% of the profit. Now, if Apple could repatriate those $$$ without outlandish tax levies (like the vast majority of Industrialized countries allow), Apple would be making investments like this in US Companies. The United States is one of only six industrialized nations (of 34 OECD members) that taxes domestic corporations on a worldwide basis. In the past fifteen years, thirteen OECD countries have moved to a territorial system that exempts all or most of active foreign earned income from domestic taxation.[4] [4] PricewaterhouseCoopers, Evolution of Territorial Tax Systems in the OECD, prepared for the Technology CEO Council (Apr. 2, 2013),  http://www.techceocouncil.org/clientuploads/reports/Report on Territorial Tax Systems_20130402b.pdf.
    battiato1981ai46rob53stevehRayz2016
  • Reply 9 of 41
    clemynxclemynx Posts: 1,510member
    Having a little firsthand knowledge of the depths of corruption at work in China, I may be one of the few here who views this entanglement with a politically-connected Chinese business with skepticism. In my experience, foreign money invested in unaccountable Chinese companies tends to suddenly vanish with little recourse. I see Tim's reliance on China for Apple growth as riskier and riskier. What happens when Trump becomes president and opens up a full on trade war with China? The odds that Apple will be punished increase severely.
    Trade war? Americans wanted free market and now you have it. You can't complain now !
    battiato1981singularitymoreck
  • Reply 10 of 41
    tzeshantzeshan Posts: 1,996member
    This deal opens a million possibilities.  
    battiato1981moreck
  • Reply 11 of 41
    volcanvolcan Posts: 1,789member
    SpamSandwich said:

    What happens when Trump becomes president and opens up a full on trade war with China?
    Trade war? If Trump is elected I would be more worried about an actual war with China.
    irelandsingularityfastasleepmoreck
  • Reply 12 of 41
    webweaselwebweasel Posts: 88member
    "What happens when Trump becomes president..." IF Trump becomes president this will be the least of everyone's worries!
    battiato1981irelandrob53singularityfastasleeprepressthismoreck
  • Reply 13 of 41
    This is a huge investment. Obviously, China wants foreign investors and they would be much more willing to grant a favored status to and approve other initiatives from a company that is willing to spend this kind of money. The connection to automobiles is obvious and it certainly ties into China's massive smog issues. No doubt, this not really about ride scheduling but about technology and manufacturing. My guess is that in addition to the business of transportation, this will involve a deal to design and manufacture key systems for Chinese-manufactured vehicles.
    Is there corruption in China? Sure, but the government is more likely to pay attention when this kind of money is on the table. The real issues with corruption would most likely be related to nickel-and-dime stuff  - small components for complex systems; such things as wiring, floor mats, fasteners and fixtures.
    I've dealt with Chinese vendors. Some are honest and some try to pull things, but they are much more likely to try something when their customer is an ocean away than when the customer is a buddy with the government. (Example - one outfit swapped white card stock for product packaging for lower-quality yellowed stock. Then they sat on it until the last minute, aware that we had certain release dates. At that point they shipped the packaged product, knowing that there was no way that we could reject the shipment. As a result, the packaging had a yellowy tinge, which cut our sales by around 10% - 15%. All they had to do was change the description of the cardstock, then pocket the difference. They knew that we would not be in a position to take them to court (or have the patience to do so, or be willing to bet that someone will not bribe the magistrate). If Apple is doing a billion-dollar sweetheart deal with the government, the crooks will be wary.
    patchythepirate
  • Reply 14 of 41
    blastdoorblastdoor Posts: 1,945member
    This is certainly consistent with my prediction that Apple will *not* sell cars directly, but instead will sell transportation as a service to iPhone users. 

    And folks, seriously.... that is just so obviously right. You're nuts if you think Apple is selling cars directly. They're going to be like Uber, but without the legal issues and inconsistent quality/safety. 
  • Reply 15 of 41
    anantksundaramanantksundaram Posts: 19,285member
    I can't help be utterly puzzled by this move (yes, I've seen the numerous comments here, including in the previous thread, that attempt to give it strategic justification -- I just don't agree with any of them).

    I think that this is a plain and simple shakedown that Apple succumbed to, and $1B down the toilet. When companies have too much money sitting on their balance sheet, gobs of evidence shows that they, at the margin, might be tempted to waste it. Apple has been remarkably disciplined about this stuff in the past, but a whole series of moves in the past few years (Beats, GTAT, now this) lack coherence. 
    SpamSandwich
  • Reply 16 of 41
    suddenly newtonsuddenly newton Posts: 13,762member
    Should we be concerned that this deal happened so quickly? A billion dollars isn't chump change.
    It is to Apple.  :o
    fastasleep
  • Reply 17 of 41
    tzeshantzeshan Posts: 1,996member
    Apple could help integrate ApplePay into Didi Chuxing services.  In turn it will help iPhone sales.  
  • Reply 18 of 41
    blastdoorblastdoor Posts: 1,945member
    I can't help be utterly puzzled by this move (yes, I've seen the numerous comments here, including in the previous thread, that attempt to give it strategic justification -- I just don't agree with any of them).

    I think that this is a plain and simple shakedown that Apple succumbed to, and $1B down the toilet. When companies have too much money sitting on their balance sheet, gobs of evidence shows that they, at the margin, might be tempted to waste it. Apple has been remarkably disciplined about this stuff in the past, but a whole series of moves in the past few years (Beats, GTAT, now this) lack coherence. 
    If it were just a shakedown, then we'd see a $1 billion donation to the Chinese crippled orphans fund (or something else erroneous). 

    This is spot on aligned with a strategy of providing transportation as a service. China is ultimately a much bigger market for that type of product than the US, and Apple clearly needs a local partner to make it work there. I wouldn't be surprised to see a similar investment in an Indian company, too. (probably no need to make such an investment in the US or Europe, though, since those markets are more easily accessible to a Western company like Apple). 
    bb-15
  • Reply 19 of 41
    anantksundaramanantksundaram Posts: 19,285member
    blastdoor said:
    I can't help be utterly puzzled by this move (yes, I've seen the numerous comments here, including in the previous thread, that attempt to give it strategic justification -- I just don't agree with any of them).

    I think that this is a plain and simple shakedown that Apple succumbed to, and $1B down the toilet. When companies have too much money sitting on their balance sheet, gobs of evidence shows that they, at the margin, might be tempted to waste it. Apple has been remarkably disciplined about this stuff in the past, but a whole series of moves in the past few years (Beats, GTAT, now this) lack coherence. 
    If it were just a shakedown, then we'd see a $1 billion donation to the Chinese crippled orphans fund (or something else erroneous). 

    This is spot on aligned with a strategy of providing transportation as a service. China is ultimately a much bigger market for that type of product than the US, and Apple clearly needs a local partner to make it work there. I wouldn't be surprised to see a similar investment in an Indian company, too. (probably no need to make such an investment in the US or Europe, though, since those markets are more easily accessible to a Western company like Apple). 
    Maybe. But I'll wait for more evidence. I'll also wait a few weeks and make sure that there isn't some news item somewhere that shows someone's brother-in-law or cousin was involved....
  • Reply 20 of 41
    anantksundaramanantksundaram Posts: 19,285member

    tzeshan said:
    Apple could help integrate ApplePay into Didi Chuxing services.  In turn it will help iPhone sales.  
    Why would you need to take a 5% stake in a company to do that?
    SpamSandwich
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