6 wildly speculative reasons why Apple invested in Didi

This morning’s bombshell that Apple has invested US$1 billion in Didi Kuaidi is still rippling through the news cycle. It’s an unprecedentedly huge investment from Apple – and it also raises a lot of questions about how this will affect Didi arch-rival Uber in China.

Here are six reasons why I believe this is happening right now:

1. It’s great China guanxi for Tim Cook and Apple

It’s tough being an outsider doing business in China. While Apple has had a much easier ride in China than compatriots like Google and Facebook, both of which are entirely blocked in the country, the Cupertino giant is going to face more issues as it increasingly focuses on web services to complement its phones and other hardware.

Tim Cook at a China Mobile store in Beijing in January 2014. Photo credit: China Mobile’s Weibo.

Indeed, Apple got a cold slice of the China diss last month when the company was forced to shutter its Chinese iBooks and iTunes Movies stores for reasons that were not made transparent.

Tim Cook’s company really doesn’t want to have the likes of iCloud, Apple Music, and Apple Pay suffer the same fate in China.

Apple’s sizeable investment in Didi can help with its guanxi in China. That’s the black magic of getting ahead in China thanks to relationships and connections you’ve built.

“We can help each other,” said Didi president Jean Liu this morning in a conference call shortly after the announcement, says reporter Amir Efrati, who joined the call. The details are sparse right now, but Didi could prove to be a useful ally for Apple when it needs a Chinese advocate.

Jean Liu is the president of the ride-hailing startup. Photo credit: Didi Kuaidi.

More tangentially, the Didi funding might give Apple a modicum of good grace when it comes to dealing with the Chinese government. It’s a vote of confidence in a Chinese startup – and in the Chinese market in general.

The cash also brings Apple closer to Didi’s other backers, such as Alibaba, Tencent, and China’s sovereign wealth fund, CIC. They’re all headed by people who are very useful to know.

2. Didi should be a solid investment

3. Millions of new iPhone customers

4. A good way to spend that offshore cash

5. A partner in Apple’s automotive ambitions

6. Planning ahead for a war on Uber