Apple just brought its automotive business to the fast lane. According to Reuters, the Cupertino tech giant has invested $1 billion in Chinese ridesharing service Didi Chuxing. The move gives Apple an opportunity to go head-to-head with Uber in China, but perhaps more importantly, it may provide critical resources for the potential self-driving Apple cars of the future.
"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 in an interview. The company is looking to boost sales overseas, but it likely has larger goals in mind.
Apple already offers its own iOS-based smart dashboard called CarPlay, and the company has long been rumored to be developing its own self-driving car. Considering that Didi Chuxing's cars complete more than 11 million rides each day, the ridesharing service could offer Apple tons of useful data that would help ensure that its autonomous vehicles drive smart and safe.
"Self-driving cars require an enormous amount of data," said iMore Editor-in-Chief Rene Ritchie in an email to Tom's Guide. "What Didi could do is provide better insight into driving in China... and data beyond what Maps on iPhone has been capable of to date."
While investing in Didi could have a major influence on Apple's eventual car business, it's also part of a larger strategy to enhance the iPhone maker's presence across the globe. As the Reuters report points out, Apple has come under greater pressure from regulators in China, and may be looking to become less dependent on the iPhone for revenue by pushing new services such as Apple Music, Apple Pay and the eventual Apple car.
"Part of the investment impetus is certainly political; any efforts Apple makes to shore up China's native tech sector should improve Apple's standing with Chinese regulators," said Avi Greengart, Research Director at Current Analysis. "Depending on what Didi is sharing with Apple, there is a lot Apple could learn from the ride sharing service about the strength, spending power, technology usage and growth of the Chinese middle class, which can then be applied to Apple's product and retail strategies.
But according to Ritchie, for Apple to succeed in a foreign market, the company will have to get its hands dirty. That's why Cook is paying China a visit sometime this month.
"You can learn a language in school or you can learn it by moving to and immersing yourself in a region that speaks the language." said Ritchie. "Smart people who really need to learn do the latter."
He continued, "Apple operating a U.S. business in China will never understand and be able to navigate the consumer, financial, and political intricacies of that country the way Apple being part of a Chinese proper business will."