Apple once again speculated to be the first trillion dollar company. So why now?

A few weeks ago Scott Galloway, the Clinical Professor of Marketing at NYU, gave an incredibly fascinating presentation at the DLD conference in New York. I just happened to notice the YouTube video of his presentation today. He spoke for about 23 minutes in an action packed presentation on the winners and losers of the digital age. I highly recommend watching the entire thing, and we've embedded the video below.

The final part of his presentation is particularly relevant to Apple shareholders and fans. Galloway explains why he thinks Apple can (and will) become the world's first trillion dollar company as measured by market capitalization. Fast forward to the 19:53 mark of the video where Galloway says "bonus round" if you want to skip everything else and just watch the Apple part.

In a nutshell, Galloway thinks Apple is going to transition into a luxury goods company much like Burberry, Michael Kors and Estee Lauder are today. He describes the luxury segment as "the best neighbourhood in the world" because you want to be in a business where people buy based on emotion rather than logic. Irrational wants and needs translate into large profit margins.

The luxury brands Galloway speaks of in his presentation all trade with an EV/EBIDTA multiple higher than 10. For those unfamiliar with this, EV is enterprise value, calculated by market capitalization plus debt minus cash. EBITDA is earnings before interest, amortization,depreciation and amortization. It's a standard financial metric that analysts look at. Galloway's point is that luxury brands trade at a higher value than Apple does today, and Apple realizes this.

His evidence? Apple hired Angela Ahrendts away from her CEO post at luxury brand Burberry. Galloway says the idea that she's going to run stores at Apple is a huge head fake. Based on his experience on boards trying to recruit CEOs he suggests the board probably pitched her by saying something like, "Apple is about to become the next great iconic luxury brand. The market is going to recognize us for this, give us a greater multiple on EBITDA that reflects how strong our brand is and we are going to be the first trillion dollar market cap company. We want you to lead that."

Galloway also points out that last year Apple hired the CEO of another luxury brand company, Paul Deneve of Yves St Laurent. You have to admit the guy makes a pretty strong argument on how Apple plan to boost its market value, and it makes more sense than Carl Icahn's suggestion that Apple leverage the heck out of its balance sheet with gobs of debt.

So, do you see Apple hitting a trillion dollars?

Disclosure: I own Apple shares.