Users won't give up their iPhones for $10K, and that makes Apple 'wonderful' says Warren B...

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Warren Buffett says his investment firm believes Apple is a "wonderful business," and especially that it has been managed extraordinarily well by Tim Cook.




Following the news that Berkshire Hathaway sold off 85% of its shares in Apple's processor manufacturer TSMC after just a few months, its CEO Warren Buffett says he's not considering selling any Apple stock. He previously cited international trade tensions with China as a reason to sell TSMC, and despite choosing to stick with Apple, he says his firm did consider the same issues.

"I weigh that in," Buffett told CNBC "Squawk Box" presenter Becky Quick, "...but Apple is an incredibly valuable utility."

"If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it."

"If they tell you [that] if you buy another Ford motor car, they'll give you $10,000 not to do that," he continued, "[you'll] take the $10,000 and buy a Chevy instead."

"I mean, it's a wonderful business," said Buffett. "We can't develop a business like that, and so we own a lot of it. And our ownership goes up over time."

" @tim_cook is one of the classiest CEOs and he understands the business. Tim Cook has managed that company in an extraordinary way," says Warren Buffett on $AAPL. "It's a wonderful business so we own a lot of it." pic.twitter.com/1lVUNIfgnT

-- Squawk Box (@SquawkCNBC)


Saying that Apple CEO Tim Cook cares about the misuse of his firm's devices, Buffett said that he thinks that "Tim Cook is the classiest CEO."

"He understands the business and he has a product which Steve Jobs basically announced," continued Buffett, "[but] Tim Cook has managed that company in an extraordinary way and I love it."

Ask by Quick whether this means Berkshire Hathaway will ever sell Apple stock, Buffett started to say no, and emphatically so. But then he did admit to an occasion when it had done so.

"No, there was one [point where], actually from a tax standpoint, it was a good idea to sell some," he said. "And it was a dumb sale."

Buffet says that his firm now owns 915 million cash shares in Apple, and that he gets asked about putting so much money into a single company. "Well, we've got a railroad worth [a] similar amount," he explains, "we've got a utility business worth [a] similar amount."

Berkshire Hathaway now owns 5.8% of Apple stock. The billionaire investor has previously described Tim Cook as a "fantastic manager" of Apple.

Read on AppleInsider

Comments

  • Reply 1 of 19
    For most people in the US, $10,000 is a trivial amount of money to base any lifelong decision on even one as unimportant as what phone you use.
  • Reply 2 of 19
    williamhwilliamh Posts: 1,005member
    For most people in the US, $10,000 is a trivial amount of money to base any lifelong decision on even one as unimportant as what phone you use.
    I disagree.  For many people in the US, $10,000 is more money than they ever had at one time.  There are also many Americans for whom $10,000 is no life changer but still a considerable amount of money.  Then are the people who will always take free money and would have no intention of following through on their commitment. 

    $10,000 would not change my life but I'd still have to consider the offer, if there were one.  I've been enjoying the iPhone since the first model but $10k to switch to other phones that are also highly regarded?  Maybe.   

    I'm not young but I still expect the iPhone (and similar devices) to become quaint vintage electronics within my lifetime, replaced by something cooler - maybe from Apple and maybe not - so I don't consider such a decision would have a "lifetime" impact.

    Another potential in-my-lifetime scenario is the pessimistic one in which everything goes to crap and which phone we use becomes a non-issue.
    retrogustodarkvader
  • Reply 3 of 19
    chutzpahchutzpah Posts: 392member
    I think I probably would.  I'd miss it for sure, but not $10,000 worth.
    darkvader
  • Reply 4 of 19
    mystigomystigo Posts: 183member
    About the coolest thing since the original iPhone is the iPhone I have now. $10,000 would not be worth it.
    lolliverwatto_cobra
  • Reply 5 of 19
    DAalsethDAalseth Posts: 2,783member
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
  • Reply 6 of 19
    chasmchasm Posts: 3,057member
    I’m sure the Tim Cook haters will be along shortly to assure us that Warren Buffett has no idea how businesses work and thus no idea what he’s talking about …
    jdwwatto_cobra
  • Reply 7 of 19
    genovellegenovelle Posts: 1,480member
    DAalseth said:
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
    If it were that simple they would already own a cheap phone instead. I was offered a position at a company a was returning to and offered a new position for IT they were creating. I had moved on from Windows and happily declined the offer to deal with them everyday. 

    The money wasn’t worth my piece of mind. 
    lolliverradarthekatwatto_cobra
  • Reply 8 of 19
    DAalsethDAalseth Posts: 2,783member
    genovelle said:
    DAalseth said:
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
    If it were that simple they would already own a cheap phone instead. I was offered a position at a company a was returning to and offered a new position for IT they were creating. I had moved on from Windows and happily declined the offer to deal with them everyday. 

    The money wasn’t worth my piece of mind. 
    I use my iPhone a fair amount, but if it vanished I’d just move a lot of the non-phone functions (music player, game system,) to an iPad Mini, and maybe get a nice digital camera. For me at least, $10k would buy a lot of peace of mind in other areas. for example the ~$7500 we’re going to need to spend on updating all of our old Macs this year. 

    I hear you about Windows though. I put in 15 years managing Windows systems, and no thank you they couldn’t pay me enough to go back.
    edited April 12 watto_cobra
  • Reply 9 of 19
    jdwjdw Posts: 1,278member
    I agree with what Chasm wrote.  

    I see so many seemingly uneducated people going around bashing Tim Cook, and many of those same people praise Steve Jobs at the same time.  I personally choose to praise both Steve and Tim.  

    My gut says that Tim could do Apple better if he would get involved more like Steve did; but Tim lacks that ability, so I fully understand why he sticks with what he knows.  And he knows a lot more than his critics in online forums, let me tell you. Folks who trash Tim aren't long-term AAPL shareholders like myself and Buffett.  These folks complain about anything, pretty much, despite the fact they've never done anything ground-breaking in their own lives.  It's easy to be a do-nothing and still chastise others.

    Tim is doing a great job.  Buffett knows that.  I know it too.  People who don't know it simply need to be educated on the reality.  And the fast-track to that education is to buy AAPL and/or Berkshire Hathaway and not sell for at least 10 years — I own both.  My AAPL purchases began in 1999, and through the years, I've never sold a single share.  Is that what we call "smart investing"?  Yes.  Oh yes.

    As to all the dialog about $10k, it's funny how most people are still missing the point.  Most iPhone users don't want to switch.  That's the point.  But if someone really did offer you $10k to switch and you did just that, would you do the intelligent thing and dump that $10k in to AAPL or Berk.B?  Most Americans probably wouldn't, and therein lies the fundamental problem.  When reading anything about Buffett, you need to LISTEN.  And what you area listening to is an intelligent talk of INVESTING, not spending like mad, be that spending to buy something you like or spending to merely pay off bills.  Spend less.  Save more.  Wait for the gains to accrue over time.
    lolliverwatto_cobra
  • Reply 10 of 19
    lolliverlolliver Posts: 491member
    I certainly wouldn't be giving up the iPhone/Apple ecosystem for $10,000 but if I had $10,000 to spare, I would be investing it in Apple stock. 
    edited April 12 watto_cobraaderutter
  • Reply 11 of 19
    williamhwilliamh Posts: 1,005member
    chasm said:
    I’m sure the Tim Cook haters will be along shortly to assure us that Warren Buffett has no idea how businesses work and thus no idea what he’s talking about …
     I am very happy with my Apple gear and I think both Cook and Buffet are awesome, and I’ve invested accordingly.  But $10k to change phones- I wouldn’t dismiss it out of hand.  
    edited April 12
  • Reply 12 of 19
    radarthekatradarthekat Posts: 3,794moderator
    DAalseth said:
    genovelle said:
    DAalseth said:
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
    If it were that simple they would already own a cheap phone instead. I was offered a position at a company a was returning to and offered a new position for IT they were creating. I had moved on from Windows and happily declined the offer to deal with them everyday. 

    The money wasn’t worth my piece of mind. 
    I use my iPhone a fair amount, but if it vanished I’d just move a lot of the non-phone functions (music player, game system,) to an iPad Mini, and maybe get a nice digital camera. For me at least, $10k would buy a lot of peace of mind in other areas. for example the ~$7500 we’re going to need to spend on updating all of our old Macs this year. 

    I hear you about Windows though. I put in 15 years managing Windows systems, and no thank you they couldn’t pay me enough to go back.
    I think you have to assume that Warren is just not sufficiently technical, or simply didn't want to complicate the challenge with additional qualifiers.  I think it's fair to assume the $10k challenge, if actually issued, would be about iOS, not just the iPhone.  You wouldn't have the iPad as a loophole. 
    lolliverwatto_cobra
  • Reply 13 of 19
    lolliverlolliver Posts: 491member
    DAalseth said:
    genovelle said:
    DAalseth said:
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
    If it were that simple they would already own a cheap phone instead. I was offered a position at a company a was returning to and offered a new position for IT they were creating. I had moved on from Windows and happily declined the offer to deal with them everyday. 

    The money wasn’t worth my piece of mind. 
    I use my iPhone a fair amount, but if it vanished I’d just move a lot of the non-phone functions (music player, game system,) to an iPad Mini, and maybe get a nice digital camera. For me at least, $10k would buy a lot of peace of mind in other areas. for example the ~$7500 we’re going to need to spend on updating all of our old Macs this year. 

    I hear you about Windows though. I put in 15 years managing Windows systems, and no thank you they couldn’t pay me enough to go back.
    I think you have to assume that Warren is just not sufficiently technical, or simply didn't want to complicate the challenge with additional qualifiers.  I think it's fair to assume the $10k challenge, if actually issued, would be about iOS, not just the iPhone.  You wouldn't have the iPad as a loophole. 
    Yes, I think a lot of commenters here are missing the point.  Warren is talking about Apple being a great stock investment because of how sticky the ecosystem is. He probably just simplified it too much by mentioning only the iPhone. It would take a lot to convince me to leave the Apple ecosystem. The same wouldn't be true for any other consumer products in my life like home appliances, car, clothing brands. It would take fare less than $10,000 to get me to change the brand of runners, washing machine or car I was planning to buy next. 

    The fact some people here would give up the iPhone only provided they can keep their Mac and access iOS via an iPad just further drives Warrens point home. 

    It would be interesting if a survey/research has been conducted on this and if not if it is done in the future.  How much of an incentive would be required to get someone to leave the Apple/Microsoft/Android platforms? How would this compare to other consumer product markets? 

    $10,000 wouldn't be enough for me to leave the Apple ecosystem, but I'm sure there would be a point that would push me to ditch it. For some people it would take less than $10,000. Especially if they just use one Apple device like the iPhone but maybe use Windows for their PC. 
    edited April 12 CloudTalkinwatto_cobra
  • Reply 14 of 19
    longfanglongfang Posts: 398member
    DAalseth said:
    If you're an Apple user and somebody offers you $10,000, with the the only proviso [that] they'll take away your iPhone and you'll never be able to buy another," he said, "you're not going to take it.

    That’s a very silly statement. Most people I know would take it in a heartbeat. Lose the iPhone, that would be unfortunate, but $10k would get me a nice Mac, and other things that would make up the difference. 
    Most of the people you know are just broke I’m guessing. 
    lolliverwatto_cobra
  • Reply 15 of 19
    darugdarug Posts: 3member
    It's quite well known that Samsungs biggest customer is Apple. Samsung supply the display screens and semi conductors (ram/storage) to Apple. They supply older tech. Both companies are negotiating that Samsung supply their batteries as well.
    Samsung phones have been far superior, cheaper and better value for money for 7 plus years now, and they have foldable screens. Many of the great innovations such as wireless charging, 5g, foldable screens, allowing 3rd party mice and keyboards, hires zooms, hires images, better waterproofing, fast charging via USBC, stronger screens etc and so n much more. What did apple do? Get rid of the 3.5mm port, get rid of the power adaptor, continue to use out of date charging methods?
    Thank god for Samsung, Google and Oppo, otherwise we will still need using iPhone 7 era tech. Admittedly the iPhone 7 was i recall a better reception phone than any current iPhone.
    Please send me 10k Warren. I'm not fooled by their marketing.
  • Reply 16 of 19
    darugdarug Posts: 3member
    Just remember, anyone below 55 is quite happy to pay 4$ for 100g of french fries from maccas instead of 500g of chips from a local takeaway.
  • Reply 17 of 19
    darkvaderdarkvader Posts: 1,129member
    $10k?  I mean, sure, Android sucks.  But I'd switch for $10k.
  • Reply 18 of 19
    darkvaderdarkvader Posts: 1,129member
    darug said:
    Just remember, anyone below 55 is quite happy to pay 4$ for 100g of french fries from maccas instead of 500g of chips from a local takeaway.
    I'm under 55 and I don't eat anything from SickDonald's.

    And I'd rather have chips than fries any day.  But most places don't have chips, they've just got fries.
  • Reply 19 of 19
    CarmBCarmB Posts: 70member
    Clearly the reference to the $10,000 was intended to illustrate a point, not to put forward a literal scenario. He was just trying to accentuate that Apple’s products are well-positioned relative to the alternatives. Apple pays attention to detail in developing product on a level that places it a cut above. Over the years there is one thing that I have not experienced much of when purchasing an Apple product, namely regret.

    I should qualify that. Back many years ago when I paid serious money for an Apple desktop, had I known how this would play out, I would have spent the $6K on Apple stock instead. Would have had enough money to buy a house, even with today’s prices. Do I wish I had traded a computer for a decent house years later . . .  
    watto_cobra
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