By Tom McGregor, CNTV Commentator
Cupertino, Ca.-based Apple Corporation has enjoyed grand success in recent years. Its cofounder Steve Jobs had introduced innovative devices – iPhones, iMacs, iPads and iWatches – to the public that sparked a buying frenzy. Corporate revenues continued to soar even after Jobs died and Tim Cook took over as CEO.
Nevertheless, Apple’s explosive growth rates would not last forever. Rivals – Samsung, Sony, Huawei and Xiaomi – have upgraded their hi-tech products to match Apple in quality, while selling them at lower prices.
Apple has also generated over $US59bn. in sales revenues in China last year, but iPhone sales have plummeted in the country this year, and the company is looking regain momentum. Accordingly, Apple announced last week it would invest $US1bn. in the Chinese ride-sharing services company, Didi Chuxing.
Buying up China
Didi has captured 87 percent of market share in China’s ride-sharing services sector. Chinese Didi customers rely on AliPay and WeChat, since Alibaba Group and Tencent Holdings Inc. are major investors of the company.
Apple’s big investment would encourage more Chinese to make payments via Apple Pay. Didi offers numerous added benefits for the company, including more domestic consumer market knowledge, Big Data analytics and further Apple integration in China’s IOS sphere.
“The investment in Didi highlights the strategic importance of China and the services segment for Apple’s future strategy,” Jack Kent, analyst IHS (Information Handling Services) Technology, told the Times of India.
He added, “It could help Apple gain greater insight into the behavior of users beyond its own ecosystem.”
Big Data entry
For the first time in Apple’s history, the company has invested into a Chinese internet company. Didi provides amazing technology helping them to play a leading role in China’s ride-sharing market.
An Apple-Didi partnership would be a learning experience as they integrate products and services for the benefit of both companies.
“We admire them (Apple) on many, many levels in terms of innovation, terms of cutting-edge technologies,” Didi President Jean Liu told USA Today. “There are always a lot of things we can learn from Apple.”
Cook has expressed reciprocal respect for Didi. He said in a press release that, “Didi exemplifies the innovations taking place in the IOS developer community in China.”
He is visiting China this week to meet business leaders and officials to embark on more collaborative efforts for Apple in the nation.
Apple Car for ride-sharing
Apple executives recognize that surging iPhones sales are no longer sustainable. In the first quarter this year, the company reported overall revenues plunging 11 percent worldwide with a 26 percent decline in China.
To reboot expansion, Apple is diversifying its investments and developing new products to excite consumers. The Didi investment can play a pivotal role for the company’s future.
According to the BidnessETC news Website, Apple is designing a new car model that would likely be manufactured at Foxconn factories in southern China. The plan, “Project Titan,” would build an autonomous self-driving car, scheduled for market entry in 2019.
Apple’s Didi investment can kickoff “Project Titan.” for the Chinese auto-market. Didi drivers might be expected to use Apple Cars.
Showing confidence in China’s market
Apple is adapting to China’s current business climate where it’s gotten more difficult for the company to enjoy astonishing sales growth rates here. That’s not awful news, since business trends go up and down, which force companies to change for the better or risk insolvency.
Apple sees Didi as a high-flying ride-sharing services company that is deserving of a more profitable partnership with the Silicon Valley giant.
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