Exploring Opportunities With StarCore

When Apple introduced the Newton last year, it put some thought into the role and significance that early applications will play in determining the success of the new device. The company also realized that a new type of computing device required an equally innovative model for application publishing and distribution.

With this in mind, Apple set out early to create a structure under which application developers could bring new titles to market, and consumers could find a focal point for a new category of personal applications. The result of this is StarCore.

StarCore is a publishing group within the Personal Interactive Electronics (PIE) division at Apple. StarCore is chartered with the role of publishing and distributing Newton software titles, along with CD-ROM products for Macintosh and Windows-based computers.

The StarCore Spectrum

In practice, StarCore offers a spectrum of relationships with application and content developers, however, the majority of arrangements tends to gravitate along two tracks:

• Publishing
• Affiliate Label

In general terms, the Affiliate Label program offers worldwide distribution and marketing for a Newton title. The StarCore Publishing program offers this, along with assuming a greater amount of the financial risk, cost of production, generation of demand, and perhaps most importantly, technical support after the product is shipping.

StarCore Publishing

StarCore’s labelling of Newton applications as titles is the first hint that Apple has structured their publishing program very similar to standard trade book publishing. As with books, the developer or content owner creates the product, together with the user manual, which is delivered to StarCore according to a pre-arranged schedule.

In return, StarCore provides an advance to finance application development. As with book publishing, this advance is matched against royalties earned from application sales. The royalties are negotiated in advance and commonly range around ten percent—again similar to book publishing—though this can vary depending on StarCore’s estimate of market potential.

In return for taking most of the profit, StarCore assumes a greater share of the risk. This risk includes the advance itself, along with the cost of manufacturing the product, and the tricky business of managing the inventory along with the dreaded returns and receivables.

StarCore also uses its presence to stimulate market demand and distributes the product through its worldwide network in 120 countries. StarCore’s most important service however—especially for smaller developers—may well be its duty in providing customer support for the product. Providing adequate support for a product requires a significant commitment and expertise that may be too burdensome for developers unfamiliar with the consumer market.

The Affiliate Label Program

Developers that prefer an arrangement that leaves more control—and more risk—in their hands, can select StarCore’s Affiliate Label program. With this program, the developer is responsible for delivering the completed and manufactured product.

The developer is also responsible for creating market demand, and must manage both the inventory and customer support for the title. StarCore provides the channel marketing, manages the returns and receivables, and provides worldwide distribution through the same network as under its publishing program.

For more information, please contact Jim L’Heureux, Business Manager, StarCore, at (408) 862-7576.

StarCore Contacts

Personal Interactive Electronic Division
Apple Computer, Inc.
20525 Mariani Ave.,
M/S 305-4A
Cupertino, CA 95014
(408) 974-8910 (fax)

Publishing Sheldon Safir (AppleLink: SHEL) – Entertainment, Information, Self-Improvement

Chris Dorst (AppleLink: DORST) – Sports, Business Applications

Affiliate Label Ivy Millman (AppleLink: MILLMAN1) – All Categories