What's going on?

Apple announced a $1 billion investment in China�s version of Uber: Didi Chuxing. The deal looks to move Apple beyond its traditional iPhone business and to deepen ties within a country that�s likely crucial to its future growth.

What does this mean?

It�s pretty much an open secret that Apple is working on developing a car (or at least some component of a car, like its operating system). From that standpoint, it�s a logical investment by Apple because the infrastructure that ride-hailing companies have created are thought to be potentially crucial to building out a network of autonomous cars. More immediately, however, the investment in a big Chinese tech company deepens Apple�s commercial, and possibly political, ties within China. This could prove important as Apple continues to try to expand within the world�s second largest economy.

Why should I care?

For stocks: Apple has A LOT of cash � and it�s under pressure to spend it. Its stock is currently near its lowest level for more than a year. Detractors are worried about the company�s growth beyond its maturing iPhone business and claim that its CEO, Tim Cook, lacks the ability to create new products that will propel future growth. One argument is that Apple should use some of its huge cash hoard (it holds over $200 billion of cash) and invest in or acquire companies that will help it grow � and this is one such investment. �

The bigger picture: The auto industry is on the cusp of a revolution � and key partnerships are already forming. The idea that one company, whether it be Tesla, Google or Uber (or anyone else), is going to handle all of our future driving needs is probably not true. But some combination(s) of technology giants, ride-sharing companies and/or traditional automakers are likely to build the future of transportation. So expect plenty of strategic partnerships in the coming years (like the one recently announced between Alphabet and Chrysler).