Apple invests $1 billion in Chinese ride-hailing company

Apple CEO Tim Cook visits an Apple store during Apple's 'Hour of Code' workshop program on Dec. 9 2015 in New York City

A Chinese ride-hailing company announced Thursday night that it had received a $1 billion investment from Apple despite the American company's rising tensions with the government in China.

With sales of the iPhone slowing, Apple is looking to diversify its investments.

Apple declined to elaborate on the intentions of the deal, but Cook told Reuters that he saw opportunities for Apple and Didi to collaborate in the future.

The company's USA rival Uber is still struggling to get a strong foothold in the Chinese marker despite having won Chinese search engine Baidu as its investor. Uber has spent millions of dollars to grow its share of the market, but is far behind Didi with its larger fleet of cars.

In February Uber admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted rides. "We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share". Apple faces a maturing high-end smartphone market and stiff competition from local players such as Xiaomi, Vivo and Oppo, among others. The Didi investment is seen as an important step towards Apple's entry into the automotive business.

Apple acquires a sizeable stake in Uber Technologies Inc's cheif Rival in China as it has hired dozens of automative experts over the past year.

Didi Chuxing was previously called Didi Kuaidi.

"The first time we met with Mr. Cook, we shared with him a joke", Didi Chuxing president Jean Lieu said on May 12. The company has recently hit hurdles in China due to Chinese regulators shutting down the company's online book and movie services to implement strict rules governing what can be published online.

The linkup with Didi also fits with Apple's desire to shore up its China sales, and its rumoured plans to enter the auto business.

Ben Bajarin, an analyst at Creative Strategies said, "This is as much about sending signals about their seriousness in that country as it is about helping Didi build a ride-sharing platform".

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