 Welcome to Newsdesk on SiliconANGLE TV for Wednesday, October 31, 2012. I'm Kristen Folletti. Apple is in the news big time, and it's not as pleasant as it normally is. Join us now with his breaking analysis on what's going on in the Valley as Silicon Angle founder, John Furrier. Welcome, John. Happy Halloween. Thank you. With Steve Jobs now gone for over a year, Apple's performance is showing a slight sign of slowing down. Yesterday on the show, Kristen Nicole joined us with breaking analysis, and we discussed some executive changes and how the new mini product has been receiving some negative sentiment in the news cycle. John, you're in the heart of Apple Land, Silicon Valley. What is the Valley lowdown on Apple? Well, I think there's no denying that it's not even in trouble at all. It's not even close to being in trouble. I think the financial kind of slowdown or the earnings thing was just a misstep and just a cyclical nature of the market. I personally think it's a sign of a bigger issue around the economy because I think Apple is a bellwether, but I think what really is happening is that Apple is absolutely stronger than people think right now. Certainly in Silicon Valley, they are not stopping down. Everyone I talk to who works at Apple at a senior level and even down to the trenches are all saying great things, that things are definitely flying higher at Apple. Yeah, I mean, it's still tense. I mean, even though that Steve Jobs is not there anymore, clearly the culture of Apple is one of secrecy still and one of excellence, and they're trying to put out the best products. Now, they've had some product snafus, and that was what Kristen was referring to in the management changes. They just kind of did something that was not very Apple-like, and that is produce a poor product in the mini and also with Google Maps, big snafu. Google's pumping and changing and keeping up with the Apple dashions. They just rounded out their Nexus line. What's the update in Silicon Valley on Google? I mean, definitely you're seeing a huge power struggle, so in Silicon Valley, at the top of the market you have the big whales going at it, Apple and Google, Intel, HP trying to get back in the game. Microsoft is up in Redmond, so I wouldn't really call them the valley company, although they do have a big presence here. There is a huge war on talent, there's a huge war on platform. Google has recognized that the search business is shifting, and that's they're constantly embedding more social features into search. They recognize that mobile is actually going to be a big thing. You saw the investment years ago with Android, with Andy Rubin leading up the charge. Google is absolutely pumping on all cylinders. They are going all in on Android. They believe that that's the PC type equivalent of this new market era, where mobile, open mobile is going to be the way to go. They're investing all in, and what their strategy is, as we commented, and I've said on my blog, is Google is trying to commoditize Apple's benefits, and that is try to meet exactly what they have for features, and then get that level, and then expand beyond it from there and differentiate. Apple's strategy is to create leadership momentum and gap between the two. So clearly a war between those two, and Google is definitely strong right now. The election takes place next Tuesday. I want to get your technology angle on the coming election. Well, I think there's a couple of things with tech. One, we've talked about it with the social media from the election to the hurricane to the Superstorm Sandy, but there's really kind of an underpinning tech angle that's a policy type thing. So you get all the politicians weighing in, innovation will die if Obama's not elected, et cetera, et cetera. Well, here's the thing that's going on in the tech business. On the business side, it's about taxes and about growth. So on one hand you have essentially a Republican argument of expand the growth of the tech sector, and that's going to be through entrepreneurship and through business that's going to impact on the tax side. On the Obama-Mooridlip Democrat side, you're saying let's grow through more spending on government programs around science, research, and education. So what you have is essentially those two camps. Kind of my angle on what I'm talking to people in the Valley is that there is absolutely a transition and transformation going on in Silicon Valley around what it used to be to be a liberal in terms of politics. And that is that everyone knows in Silicon Valley that government programs into science, whether it's Stanford here or on the East Coast, MIT and other institutions, promotes entrepreneurship as kind of a supply side or trickle-down effect from those programs. At the same time, they're recognizing that most people in the tech business are becoming fiscal conservatives and liberally social. That is absolutely the trend that I'm seeing here. And what that favors is kind of a reform type candidate. So there really isn't a Democrat Republican candidate anymore for Silicon Valley. I think it's right in the center of this, hey, let's get fiscal about business and conservatism on financial. But let's be very liberal on social policies. And that ultimately defines everyone under the age of 60, in my opinion, in Silicon Valley. So where that is, is that we need more education. And that's where I'm seeing a lot of change over from the old school Democrats, and that is around education. Education's failed. Mike Hahn is pumping up education as Obama's big thing. But the bottom line is if you look at the tech business, education's transforming with Khan Academy. Stanford's producing some very aggressive courseware. So what you're seeing is that's a highlight, in my opinion, of this new reform mindset. This is the new policy. This is the new political position. It's fiscal conservatism and socially liberal. And that is absolutely kind of this halfway between Democrats and Republicans. And that's going to affect the next 10, 20 years of tech policy. John, you're following the VC and startup market in Silicon Valley. What's the state of the current startup economy in Silicon Valley? There's definitely a transition going on from the consumer side of the app side of the business. So we saw the Twitter. We saw Facebook. Even though Facebook, I'm long on Facebook, I think Facebook would have great value. It doesn't help their cause that they had a really kind of weird IPO and that they just produced numbers yesterday that said Cheryl Sandberg just raked in $800 million in compensation from working there since 2008. This does not bode well for essentially the rest of the world who are looking at the aromnes of the world saying, hey, CEOs are getting paid way too much when you got Cheryl Sandberg who's only been working at Facebook from 2008 who just basically put in $800 million in her pocket. On the other hand, you got Twitter trying to fumble through their revenue model. It looks like they're going to do well with that. In between that, you have Zynga, which is failing and trying to repivot and get the growth back. So you have this consumer market of just kind of like a couple of big guys and a wasteland of failed startups. So this tells me that the startup economy is going to be kind of troughing down and trying to reboot around what that means. And here's what I see. Huge growth in the enterprise type deals, business value oriented companies, companies that providing technology and or services that produce cash flow and customer satisfaction and happy customers that's called revenue. Anyone who's not a revenue producing company essentially is essentially marked in this wasteland of kind of no man's land of startup land. And this is where the angels and these so-called super angels have been, in my opinion, failing. I call that the snake oil VC. And I think I'm going to end up turning out to be actually correct on this one where you have this kind of investment climate with Y Combinator and these super angels or micro VCs that are just, you know, overspending on everything. So it's kind of creating this false metric around startups. So I think that bloom is off the roads. I think you're going to see the super angel or micro VCs who are running around, spin money left and right kind of kind of go under. And you're going to see only a few people kind of left standing at the ball there. And then you're going to see a shift towards what I call enterprise like content or startups. And that's the trend. And I think that's consistent with what we're seeing with Google, Microsoft and some of the big players around cloud and mobile. Anything else in the valley of note that you want to discuss trends that you've seen or hot topics right now? Yeah, I think, I mean, one of the things that no one really talks about is LinkedIn. And I was really kind of not high on LinkedIn when they went public. I'm like, wow, that's a $10 billion company for a Rolodex. But I did say in my blog post and in my commentary in the cube was what LinkedIn can do is really get ahead of the game on Facebook on the social graph value. So since LinkedIn went public, look at what they've done with big data. LinkedIn has quietly been building an arsenal of talent around big data using the social networks of people's Rolodex to essentially create not only just a recruiting opportunity for revenue, but also social value. And they are quickly pivoting and moving to a user experience on LinkedIn that's going to rival Facebook. So LinkedIn has done exactly what they needed to do post IPO. They had a huge pop, huge hype on their asset. They did exactly what a good management would do. They actually turned that around and build value on top of it. So I think LinkedIn is one of those stories that no one's really talking about or truly understands yet. And I think the real discussion there is Twitter versus LinkedIn. So I'm watching that very closely. Outside of that, I think Intel and HP are interesting stories to look at in Silicon Valley because they're going to have an impact on the embedded intelligence chipset market. You know, there's talk of Intel doing 48 cores on a mobile device. That's incredible technology. That's the kind of innovation under the cover that's going to fuel the compute for big data and servers and cloud and mobile. So to me, that's kind of the stories that we're tracking. And obviously the startup scene, we're looking at the capital markets seeing if that's going to stay positive with the election looming. John, one more really important question. What are you going to be for Halloween? I'm going to be a stressed out dad trying to run a media company. But we don't know yet. I'm going to probably end up putting the mask on and giving out candy at the door. Our house in Palo Alto, we give out literally thousands and thousands of pieces of candy from in a four-hour stint. It's like a parade on our road here. It's a huge deal. Well, thanks so much for your time today. Happy Halloween. Thanks. For end-up coverage on tech news of the day and the latest breaking analysis, tune in daily to Newsdesk on SiliconANGLE.tv.