As the largest company in the world, Apple (NASDAQ: AAPL) tends to operate by different rules than its competitors.

Wall Street and the rest of the world seem to have shrugged off the fact that Apple has missed the bar lately with falling iPhone sales throughout 2016.

Even last October, the company revealed its first ever fall in annual sales and profits in 15 years.

But it still remains the largest company in the world, despite current failings, with a stock market value of over $750 billion.

It’s become more difficult for Apple, and for its competitors, to diversify and expand the stale smartphone sector.

Rumors claim that the next iPhone release will be legendary, with wireless charging, 3-D facial recognition, and a curved display.

But even so, an upgrade to an essential product is unlikely to be the earth-shattering, game changer that Apple needs in order to regain its lost momentum.

However, it would be foolish to say that Apple has reached its peak as you can never be sure what it’s hiding within its research and development buildings.

The biggest company in the world also happens to be sitting on one of the biggest piles of cash in the world, more than a quarter of a trillion dollars.

So, how does the company intend to spend it?

Introducing the iVape?

It looks like Apple has recently filed a patent for a vaporizer device with the USPTO.

Yes, that’s right — a vaporizer device.

Vaporizers have risen in popularity as an alternative method for consuming nicotine or marijuana over traditional combustion counterparts.

They’re also used in other industries, such as health care and agriculture, so it’s possible that Apple is thinking of uses other than just recreation.

The market for these devices has grown into a multibillion-dollar industry.

A 2015 estimate for market size put it at $3.5 billion.

As a handful of states have passed some form of marijuana legalization, this number has certainly grown since then.

Market intelligence provider BIS Research estimates that the vaporizer market in the United States is “poised to grow over $20 billion by 2025.”

Another market research provider, Research and Markets, estimates that the global vaporizer market will be worth well over $32 billion in as soon as 2021.

The details are still a bit hazy, but the patent filed by Apple lists it as the invention of employee Tetsuya Ishikawa.

According to the 11-page patent application’s numerous descriptions and figures, this vaporizer device looks to be an extremely high tech device.

Although the application does not specify what is meant to be vaporized within the device’s chamber, the abstract does state “a substance that is to be vaporized or sublimated into a vapor.”

It seems that the purpose is to be left up to the user’s discretion.

Regardless, this device definitely looks capable of handling cannabis oils and extracts, among other things.

As of now, there is no one leader in vaporizer devices, so the massive market is currently shared by many smaller participants.

Just like Apple did in the smartphone industry, it could very well dominate the vaporizer industry.

However, the tech giant often files patents for products that it never ends up bringing to market, just like the foldable phone and the wraparound iPhone screen — which have yet to be seen in product form.

Whether Apple intends to use this one itself or if it sells or licenses the patent to other manufacturers, Ishikawa’s design appears to improve upon current vaporizer technology.

Electric Self-Driving iCars

Despite the circulating rumors, Apple isn’t building its own car, after all — at least, not anytime in the near future.

Instead, CEO Tim Cook states that Apple is working on “the mother of all AI projects,” a self-driving car technology that could establish the company as a major innovative player within the automotive industry.

During an interview earlier this month with Bloomberg, Cook laid all rumors to rest with the basics of Apple’s automotive endeavor:

We’re focusing on autonomous systems. It’s a core technology that we view as very important. We sort of see it as the mother of all AI projects… It’s probably one of the most difficult AI projects to work on.

It was the first time that Cook had ever directly addressed the company’s automotive plans, even as rumors about an “iCar” buzzed around over the past few years.

Indeed, Apple had originally planned to create its own car.

The iPhone maker had hired more than 1,000 engineers to work on Project Titan, as the car team is known internally, after its inception in 2014.

But, the company has recalibrated its attentions to focus on the artificial intelligence (AI) technology that powers driverless cars instead.

In April, Apple became the 30th company to receive a California DMV permit to test autonomous systems on public roads with the Lexus RX540h SUVs.

There’s no doubt about it, the amount of risk is immense, and the endeavor could very well fail.

But the endeavor is a gamble that Cook and his team are willing to take as it’s probably too late in the game to completely reinvent the car-building process.

Rather, the company aims to master the technology that will allow for the safest self-driving cars.

Autotrader analyst Michelle Krebs has this to say about Apple’s Project Titan:

Apple has long been the wild card in the autonomous car game. Now we know Apple is all in, and, judging by its track record in other areas, it will be a force. Apple’s strategy to commercialize autonomous vehicles remains to be seen — will they partner and sell the technology or actually develop their own vehicles?

What to Do With All That Cash?

Instead of its creation of some new whirlwind gadget, Apple’s newest headline could be its acquisition of another company. It certainly has the funds for it.

Analysts at Citigroup have drawn up a list of seven companies that would be suitable for Apple to acquire with its ginormous mountain of cash.

The potential takeover targets include:

• Netflix, Inc. (NASDAQ: NFLX)
• Hulu LLC
• The Walt Disney Company (NYSE: DIS)
• Tesla, Inc. (NASDAQ: TSLA)
• Activision Blizzard, Inc. (NASDAQ: ATVI)
• Electronic Arts Inc. (NASDAQ: EA)
• Take-Two Interactive Software, Inc. (NASDAQ: TTWO)

In line with Apple’s Project Titan, buying Tesla could be a transformative gain and would help the tech company toward the development of driverless electronic cars.

This acquisition presents a perfect synergy for both companies: Apple lacks growth and innovation, and Tesla lacks financial stability.

The issue for Tesla is the enormous costs associated with running the company and the cash it requires. However, it has tremendous growth and innovative products.

Apple lacks growth and innovation but has enormous financial stability. It seems the two companies could have a successful partnership as each has what the other desperately needs.

A Tesla acquisition would create a natural procession with any existing Apple car program and the combined entity could have enormous cost benefits.

This would also allow management to focus on its existing businesses and not have to risk the expensive launch of an Apple car.

The potential benefits of the deal for the short and long term would be enormous.

But you shouldn’t hold your breath for Apple to make a bid for any company.

Until Apple makes a bold acquisition, expect the Wall Street gossip mill to keep churning out more speculative stories that suggest things that Apple might buy.

That’s all for now.

Until next time,

John Peterson
Pro Trader Today