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Apple has invested $1bn (£693m) in Didi Chuxing, the car-hailing app that has a greater market share than US rival Uber in China.

Tim Cook, chief executive, said that the move would help Apple to better understand the Chinese market.

Didi Chuxing, previously known as Didi Kuaidi, said it represented the single largest investment in its history.

The firm said it provided more than 11 million rides a day and claimed to have 87% of the Chinese market share.

The company is also backed by Chinese internet giants Tencent and Alibaba.

US rival Uber has been struggling to break into the Chinese market despite having won Chinese search engine Baidu as an investor.

In February Uber admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted rides.

China correspondent, Stephen McDonell:

Before Didi Chuxing's app, pretty much the only option to catch a cab in China was to hail one in the street. In most cities, there were no widely-used phone booking services like those in other countries. People might have a few phone numbers of taxi drivers they knew to call and see if they were driving in the area but that was it.

Then - as with other technologies - China leapfrogged into the future.

Suddenly everyone had the "Didi" app: it could line up a driver, see how many taxis were in the area, put you in contact with a driver, even offer a tip to get a vehicle there more quickly. Now in cities like Beijing and Shanghai on a Friday night you're struggling to hail a cab in the street because they're all taking Didi bookings.

US rival Uber is also making a big, costly, push into China and is popular with more affluent customers.

Didi has responded with its own premium car service. It's already merged with one rival Chinese company and a huge investment from Apple could see it expand and stave off the challenge being thrown down by other apps.

Mr Cook said he saw many opportunities for Apple and Didi Chuxing to collaborate in the future.

He also stressed the deal was a chance to learn more about China as Apple's second-biggest market.

Apple's ambitions in China has recently hit roadblocks with Chinese regulators shutting down the company's online book and movie services to implement strict rules governing what can be published online.

The move was widely seen as a blow to Apple, which is keen to ensure its products are popular and sell well in China, because it is the second-biggest market for its products.

Apple reported in April that its revenues fell for the first time since 2003 with China marked out as a particular weak spot.