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Apple Just Invested $1 Billion In Uber's Biggest Rival

Apple Inc. NASDAQ:AAPL, Alibaba NYSE:BABA - Apple Just Invested $1 Billion In Uber's Biggest Rival

Apple Inc. AAPL has invested $1 billion in Chinese ride-hailing service Didi Chuxing, dealing a severe blow to Uber's expansion efforts in the country.

The investment from Apple, which joins Tencent Holdings Ltd TCTZF and Alibaba Group Holding Ltd BABA in investing in Didi, comes as the iPhone maker is trying to understand Chinese market where it has come under heightened regulatory scrutiny. CEO Tim Cook is visiting the country this month.

Related Link: Uber's $100 Million Settlement With Drivers Suddenly Looks Cheap

According to a report on Bloomberg, "Didi's funding round has now reached $3 billion and the company is valued at about $26 billion."

For Uber, the news is a clear negative, as the firm is investing heavily and unable to succeed in taking market share from Didi, which has better coverage and fleet versus Uber in China. In China, DiDi is said to have more than 87 percent market share in private car-hailing and over 99 percent market share in taxi-hailing.

Uber CEO Travis Kalanick has responded to the Apple investment in Didi through a following tweet:

"girlfriend owns @apple shares which makes her a didi investor...#Smh #ridesharewars #domesticissues #thanksALotTim"

For Apple, the investment aligns with its strategy to look for other higher-margin avenues of growth, as its iPhone demand is saturating in developed markets and faces strong competition from Chinese rivals in Asian markets such as India.

Commenting on the investment, Tim Cook said, "DiDi exemplifies the innovation taking place in the iOS developer community in China. We are extremely impressed by the business they've built and their excellent leadership team, and we look forward to supporting them as they grow."

Didi said Apple's investment is the single largest the company has ever received.

In a press release, DiDi said it now completes over 11 million rides a day on its platform, serving close to 300 million users across over 400 Chinese cities with a diverse range of mobile technology-based transportation options.

"The endorsement from Apple is an enormous encouragement and inspiration for our four-year-old company, Cheng Wei, founder and CEO of DiDi, said in a statement.

Shares of Apple ended Thursday's regular trading session at $90.34.

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.