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Warren Buffett: I used Berkshire's insights into the furniture business to figure out Apple's worth

  • The Berkshire Hathaway CEO says it's "amazing" how Apple has resonated with consumers.
  • "You can't move people by price in the smartphone market" like in appliances, Buffett says.
  • Despite some softer sales recently, consumer loyalty to the iPhone is "huge," he argues.

Billionaire investor Warren Buffett told CNBC on Monday it's "amazing" how Apple has resonated with consumers, and that's why Berkshire Hathaway bought the stock.

"I can very easily determine the competitive position of Apple now and who's trying to chase them and how easy it is to chase them," Buffett said on "Squawk Box" from Omaha, Nebraska, following Saturday's Berkshire's annual meeting.

Buffett said he used Berkshire's insights into the furniture business to figure out Apple's worth.

"We happened to be well situated in terms of having these massive home furnishing stores. I can learn very easily how consumers react to different things there," he said, referring to Berkshire's ownership of Nebraska Furniture Mart. "You can't move people by price in the smartphone market remotely like you can move them in appliances or all kinds of things. People want the product. They don't want the cheapest product."

Despite softer sales in the most recent quarter, consumer loyalty to the iPhone is "huge," Buffett said. "It's a very, very, very valuable product to people that build their lives around it. And that's true of 8-year-olds and 80-year-olds," he added.

Asked why Berkshire Hathaway bought Apple stock, Buffett said, "The shares when we bought them at least were much more reasonable in relation to current earnings."

In a CNBC appearance in February, Buffett revealed Berkshire more than doubled its Apple holdings a month earlier, giving the conglomerate a 2.5 percent stake in the Apple's outstanding shares.

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