Not everything Apple touches turns to gold. This is now evident at the Chinese Didi Global. Apple invested heavily in the company, but that now seems to be turning into a big fiasco.
Apple is not averse to making regular targeted acquisitions or investments. The best known acquisitions in recent years are of course Beats Audio and the music app Shazam. Services that are now an important part of the company. How different it has been with Didi Global.
Apple and Didi Global
Didi Global can be compared to Uber or Lyft. It is a Chinese company that arranges rides between drivers and passengers through its own cab app. Apple saw it as the ideal investment and decided to pump $1 billion into it. CEO Tim Cook called it a strategic investment that would help the company better understand the Chinese market.
That was all going reasonably well, until last year. That’s when Apple received notice from a Chinese Internet watchdog that it had to remove the cab app from the Chinese App Store. Beijing, it said, was afraid that company would misuse consumers’ personal data.
A hefty loss
A cab app that is not downloadable is obviously the death knell for a company. The value of its shares fell by 80 percent. On top of that, last month the company was fined $1.2 billion by the Chinese government after years of investigation. According to Beijing, the app would have endangered national security. Not a very good experience for Apple, then.
“Nice, then” (Image: Josh Edelson / AFP)
By the way, Didi Global is not the only one dealing with the strict Chinese government. Other large internet and tech companies such as Alibaba and Tencent are also facing Beijing’s attempts to curb their power.
For Apple, enough is enough now, reports noted Bloomberg journalist Mark Gurman. The company is giving up its board seat at Didi Global as the company struggles to grow. How to proceed for Apple is the big question. For the tech giant, at least, it has been a good lesson. The company is now more cautious when it wants to make acquisitions.