Didi Chuxing president says Apple deal closed in 22 days, talks in progress in several areas
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.
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.
Comments
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.
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.
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.
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).
Why would you need to take a 5% stake in a company to do that?