(Reuters) – Warren Buffett on Thursday said he could not predict the success of Apple Inc. ‘ s new suite of services, but was convinced that the public would benefit content providers are competing for their wallet.
FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc., gestures during the playing of bridge, as part of the annual meeting weekend in Omaha, Nebraska, USA May 6, 2018. REUTERS/Rick Wilking/File Photo
The billionaire chairman of Berkshire Hathaway Inc, which owns a large stake in the four largest U.S. carriers, also said that the industry is again worried about the safety, even after Boeing Co 737 MAX aircraft were pulled from service.
He also said that the pace of growth in the U.S. economy, which is on a 2.2 per cent on an annual basis, came last year in the fourth quarter, appeared to have slowed down, but that doesn’t change anything we do” in Berkshire.
“You really want to bet on America,” said Buffett, who spoke in Grapevine, Texas at an event, broadcast by CNBC.
Apple on Monday announced an ambitious plan to refocus itself as an entertainment and financial services company, including a dive in the video streaming and the launch of a Goldman Sachs-branded credit card.
Buffett, whose company owned of $40.3 billion of Apple stock at the end of the year, said the iPhone-maker “can afford a mistake or two” of companies such as Amazon.com Inc., Netflix Inc. Walt Disney Co. to compete for the attention for the customer.
“Eyes are not going to double,” he said. “That is not an easy game to predict, because you have very smart people with a lot of resources trying to figure out how to grab a half hour of your time.”
But he said ten years from now, such as the delivery of entertainment content improves, “the audience will be the winner.”
Buffett also defended Berkshire’s roughly a tenth of a stake in American Airlines Group Inc, Delta Air Lines Inc, Southwest Airlines Co. and United Continental Holdings Inc., despite problems with the 737 MAX.
Berkshire began the collection of these rings in 2016, surprising many investors because Buffett had seen the industry as competitive and capital-intensive after making an investment in USAir Group, which he later regretted.
“I don’t think it’s a suicidal thing more,” he said Thursday.
Buffett added that Boeing, which is not a Berkshire investment, “has a lot of work to do very quickly,” but that “the airline industry is so safe.”
Buffett also showed his usual humor, which the audience laughs as he removed a flip-phone out of his pocket during the Apple discussion.
“Alexander Graham Bell lent it to me and I forgot to return,” said Buffett, 88, who was born eight years after the telephone’s inventor died.
Reporting by Jonathan Stempel in New York; Editing by James Dalgleish