THE possibility is growing that Apple, the world’s most valuable company, will splash some of its huge cash reserves on a giant acquisition that will expand its empire beyond iPhones and other gadgets – with speculation rife that the Walt Disney Company is high on its shopping list.

The guessing game over what California-based Apple might do with the quarter of a trillion dollars it has stashed away initially focused on possible targets such as Netflix and Tesla Motors. Either deal could make sense, given Apple’s long-running interest in providing a TV service to consumers, and its more recent work on self-driving cars.

But in recent months the takeover talk has swirled around whether Apple might do something even more dramatic by making a bid for Walt Disney Co. Such a combination would create the world’s first company worth $1 trillion. Beyond that, an Apple-Disney marriage would unite some of the world’s most successful brands in technology and entertainment, including the iPhone, iPad, Mac computer, Mickey Mouse, Disneyland, ESPN, Lucasfilm, Pixar and Marvel.

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RBC Capital Markets analyst Amit Daryanani said in a research report assessing an Apple-Disney combination: “If there’s a deal out there that would strike fear in the hearts of Silicon Valley and Hollywood, this could be it.”

While refusing to discuss specific companies, Apple chief financial officer Luca Maestri admitted it is exploring far and wide.

“We are looking at every size of acquisition, so we will see how it goes going forward,” he said.

Disney has not given any inclination that it is looking for a buyer, but publicly-held companies are required to consider all takeover offers. Daryanani estimates that Apple would have to pay $157 dollars a share, or about $250 billion. Apple is one of the few companies, if not the only one, that could pay that sum out of its pocket. It ended March with $257bn in cash and marketable securities, according to figures released this week with Apple’s first-quarter earnings report.

That is up from $233bn a year ago and the figure is expected to keep growing as Apple piles up more profits from the iPhone, iPad and Mac, as well as the applications and services that feed those devices.

In its latest quarter, Apple’s earnings climbed five per cent to $11bn while revenue also rose five per cent to nearly $53bn.

The company disclosed plans to raise its quarterly dividend to shareholders by more than 10 per cent to 63 cents per share.

Doing a mega-deal would be a major departure for Apple, whose largest acquisition to date was its $3bn purchase of Beats Electronics in 2014 that helped launch its music streaming service.

But Daryanani and other analysts believe Apple may need to make a pricier acquisition to lessen the company’s dependence on the iPhone at a time when smartphone sales have been slowing.

Sales of iPhone sales edged up one per cent in the first quarter of 2017, extending a recovery from an unprecedented downturn last year. However, many investors remain concerned that Apple has become too vulnerable to the ups and downs of the smartphone market, mostly because the company has not been able to come up with another hit product since the 2011 death of co-founder Steve Jobs.

Apple’s last big success, the iPad, came out in 2010, but sales have been declining for more than three years. The iPhone has accounted for nearly two-thirds of Apple’s revenue in the past quarter.

The Trump administration may give Apple another reason to mull a major acquisition, with promises to lower US taxes on overseas corporate cash brought back to the country. Should that happen, CEO Tim Cook has said Apple will consider bringing back most of the more than $230bn dollars it has in foreign countries, making it easier to finance a blockbuster deal.