Apple investing $1B in Uber rival Didi

Apple is investing $1 billion in Didi, Uber's biggest ride-sharing competitor in China.

The Beijing-based company, a one-stop mobile transportation platform formerly known as Didi Kuaidi, made the announcement Friday morning in China. The development is the latest in the intense competition being waged between Uber and Didi in the world's most populous country. Both companies are offering drivers and riders generous incentives to sign up for their services. 

"We admire them on many, many levels in terms of innovation, in terms of cutting edge technology," Didi president Jean Liu said said in a news conference. "There are always a lot of things we can learn from Apple."

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The investment comes after Apple experienced its first-ever quarterly drop in iPhone sales last quarter, which has put the brakes on its shares' once unstoppable momentum. China is Apple's second-largest market, and a drop in demand there has hurt overall sales.

Apple (AAPL) shares were flat in early trading Friday. They're down 30% in the past year.

The investment goes against the grain for Apple, which tends to make small acquisitions of entire companies, largely for intellectual property and talent. In February, Cook disclosed Apple had acquired 19 companies over the past five quarters.

The investment is also likely to bolster expectations that Apple is working on some kind of electric car, a project Tesla CEO Elon Musk has called an "open secret" in Silicon Valley.

"We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," Apple CEO Tim Cook told Reuters.

Didi Chuxing's dominance in China has cut into Uber's success, though the American ridesharing service remains the world's richest with a valuation of $62 billion as of December. As of January, Didi Chuxing — which counts Alibaba and Tencent among its investors — had a presence in 400 cities in China, The Wall Street Journal reported.

Uber CEO Travis Kalanick shrugged the news off, tweeting:

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

Contributing: Jessica Guynn