On March 25, tech giant Apple (AAPL) announced plans to expand its services segment. In a star-studded event, the company unveiled video streaming services called Apple TV+ among other services like new subscription and game subscription services. A recent sharp decline in the company’s product segment sales, especially iPhone sales, have encouraged Apple to raise its bets on the services segment.
Warren Buffett’s views
In a recent interview on CNBC at The Gatehouse’s event, Warren Buffett said that he would “love to see them succeed” while commenting on Apple’s raised bets on the entertainment industry with its upcoming video streaming services. At the same time, Buffett didn’t seem quite impressed with the Apple TV+ announcement as he added Apple is “a company that can afford a mistake or two.”
During the interview, Buffett pointed towards stiff competition in the entertainment industry (QQQ), which he thinks can actually accommodate only a few big quality players ten years from now.
Jokingly, Buffett said, “You don’t want to buy stock in the company that has to do everything right,” and “Apple should do some things that don’t work.” However, Buffett refrained from directly relating his “things that don’t work” statement to Apple’s video streaming services, saying that he doesn’t know its future.
Before Apple’s March 25 event, its stock traded on a bullish note, outperforming the broader market (SPY) due to investors’ high expectations from the event. However, after the event, its stock has largely turned negative.