Warren Buffett buys more Apple, says phones ‘enormously underpriced.’
NEW YORK• The Oracle of Omaha is adding to his already large stake in Apple Inc.
Warren Buffett, 88, likes the technology giant because of its devoted customers, and has built up his stake in the company by “just a little” since his last regulatory filing, he said Thursday in an interview with CNBC. The Berkshire Hathaway Inc. chairman and chief executive officer said his firm has also bought back some of its own stock recently.
“They’ve got to keep having the product that this huge clientele regards as indispensable,” Buffett said of Apple. For customers, “the iPhone is enormously underpriced” compared with the utility it offers, he said.
Berkshire has been piling more money into Apple, increasing that stake to 252 million shares as of June 30.
The investment is worth more than $50 billion and makes Berkshire the thirdbiggest shareholder in Cupertino, California-based Apple, with a more-than 5 per cent stake, according to data compiled by Bloomberg. Buffett has expanded his company into a conglomerate with a $520 billion market cap and footholds in the railroad business, insurance industry and energy sector.
With the help of deputies Todd Combs and Ted Weschler, the billionaire investor also oversees a $180 billion stock portfolio that includes stakes in Wells Fargo & Co.
Earlier this year, Buffett teamed up with JPMorgan Chase & Co.’s Jamie Dimon and Amazon.com Inc.’s Jeff Bezos to create a venture that’s aiming to change how health care is provided to the three companies’ employees.
In June, the group named Atul Gawande to lead the initiative, which will be based in Boston. While exact details on the venture are scant, Buffett has previously said that the goal is to go beyond just squeezing middlemen and actually lower costs and deliver better care.
Gawande is in the process of adding staff now.
“He’s hiring people,” Buffett said in a subsequent interview with Bloomberg Television Thursday. “Not very many people, but he will be hiring people.”
The initiative won’t succeed if it’s just a cost-cutting measure, Buffett said. “We’d like to be in a hurry but we’re not going to try and do something faster than it can be done,” he said.
Meanwhile, Apple said on Thursday it will host an event on Sept. 12 at the Steve Jobs Theater in the company’s Cupertino, California, campus, where it is widely expected to unveil new iPhone models.
Analysts believe Apple plans to release three new smartphones this year, including one with a larger display than previous models. Analysts also expect Apple to release an iPhone with a edge-to-edge display similar to the iPhone X but using less costly LCD screen technology.
Apple’s event invitation made heavy use of the colour gold, fuelling speculation on social media that the company plans to launch a gold-coloured successor to the iPhone X, which was only made available in silver and grey last year.
Apple has for years released its new phone models in the second week of September, and often updates other product lines such as the Apple Watch at the event.
The company has already given base-model iPads and some MacBook laptops an update this year.
Apple typically starts selling new iPhones a few weeks after launching them, in time for the holiday shopping season. It broke with that practice last year by releasing the iPhone X weeks later than usual, prompting concerns the flagship model might sell fewer units during what is typically Apple’s biggest sales quarter.
But those fears turned out to be unfounded, and the iPhone X, priced at $999 and up, helped Apple beat Wall Street sales expectations.