Editor’s note: Ross Rubin is principal analyst at Reticle Research and blogs at Techspressive. Each column will look at crowdfunded products that have either met or missed their funding goals. Follow him on Twitter @rossrubin.

Once rejected by Kickstarter, the smartphone-controlled door lock Lockitron was a crowdfunding hit on its own site. Still, for the foreseeable future, most locks will be opened with the insertion and turning of those sculpted metal strips known as keys. Their manual mechanics are an anathema to today’s early adopter. Worse, they jangle around in your pocket, ready to unleash their inner Inigo Montoya on whatever naked, valuable glass-clad object that dares invade their domain. Recently, though, a trio of crowdfunded projects sought to establish study enclosures to organize and keep those rustling rapscallions literally in line.

Backed: KeyPort Slide 2.0 Seeking no less ambitious a goal than reinventing the keychain, the KeyPort Slide 2.0 is, as its numerical suffix denotes, is the second-generation of an early attempt to keep keys in line and, like the original, fully enclosed. Also true to its name, the Slide allows you to extend the business end of your keys out from the enclosure to do its unlocking, after which it is retracted back into the KeyPort. And the whole package can fit into that otherwise useless front mini pocket in your jeans that the iPod nano once claimed.

The slick functionality comes at a price, though. In order to work with the KeyPort, the fat part of the key normally used for gripping are replaced with tiny blades that allow insertion into the device. This requires a trip to your local key duplicator in the best of circumstances. The KeyPort Slide comes in three colors and, if you’re something less than the master of unlocking, you can include such goodies as a flash drive, LED flashlight, bottle opener and barcode holder. Over 1,600 backers have slid more than $110,000 toward the KeyPort, pushing it past its $75,000 goal. The KeyPort Slide 2.0 is expected to ship in May.

Backed: KeyFlip. If you’re feeling a bit freer with your keys or are averse to chopping off their heads, you may be more interested in the KeyFlip. Similar to the hinge on a Swiss Army Knife that keeps blades neatly tucked away, the KeyFlip enables keys to fan out. Fine, you say, but does it include an integrated bottle opener so I don’t need to get an iPhone case that includes one? You know it does. But the bite-size video raises some concerns. It appears that there may be difficulty in isolating the key you need. This is a particular concern for less-used keys since, unlike with the KeyPort, there’s no handy color coding for association. Over 800 backers didn’t give a flip as the KeyFlip, due to ensconce backers’ keys this month, collected nearly $32,000 beyond the $2,200 sought.

Whacked: BladeKey Pocket Key Organizer and DIY Pocket Tool. The BladeKey is the patented cousin of the KeyFlip, keeping unmodified keys close to each other. However, it’s a racier relative, showing off enough of the keys’ form to be banned at the Grammy’s per CBS’
Standards and Practices department. The company, which had been selling plastic versions of the vaguely elongated earmuff-shaped devices, hoped to step up to aluminum.

The move up to the classier material, though, seemed to contrast with its reliance on zip ties, which the campaign page devotes six bullet points to defending. Did you know that zip ties are easier to remove and insert than pop rivets? You’re welcome. Available in sizes to accommodate three, six or nine keys, the zip-tie-embracing aluminum BladeKey was to ship in March, but the Indiegogo campaign ended with only $1,656 collected of its $15,000 goal.

Article courtesy of TechCrunch

Editor’s note: Mike Ghaffary is the vice president of business development at Yelp. He also co-founded Stitcher and BarMax, the $1,000 iPhone app, and is a former VC. Follow him on Twitter at @newmike.

Marc Andreessen and Reid Hoffman recently debated whether software would eat traditional retail, leaving no brick-and-mortar presence behind. Both articles noted that e-commerce is currently only 5 percent of retail in the U.S., while the other 95 percent is brick and mortar.

While Andreessen holds firm that e-commerce will completely overshadow physical retail, the debate missed why some industries will never go completely online.

Some industries will have a hard time competing as more consumers embrace online shopping, but some industries will do just fine. I have constructed a simple formula that can show that the magnitude of offline local commerce is likely to be larger than e-commerce for a long time. These calculations could have predicted that Amazon was going to do very well in categories like books and iTunes in music, but the $300 billion clothing industry is going to stay mostly brick and mortar for the foreseeable future, as are many service-driven local businesses.

One quantitative way to gain an understanding of which local businesses will be eaten by software and which will live on is to understand the local coefficient. The local coefficient (L) attempts to define how “local” each category of product or service must be, normalized on a scale of 0 to 1. You could even pick a number from 0 to 1 for each category (e.g. 0.2 for books, 0.9 for restaurants, 0.6 for clothing, etc.) based on your own intuition of how “local” it must be, but I tried to make the assessment more granular by breaking it down into three parts.

Here is the equation I use to calculate the local coefficient:

L = (e + t - s + 5) / 15, with each of the following input variables ranging from 1 to 5:

• e = experiencing the service or product in person after buying it is important
• t = trying, touching, or seeing the product or service immediately before buying it is important
• s = substitutes are available online from a reliable source

Table 1 below shows my assessment of the local coefficient for a variety of industries. There is certainly a fair amount of subjectivity in choosing the variables e, t and s. For example, I assumed that for books, the desirability of experiencing them physically (e) is only a 2 out of 5. While some people say they still prefer the touch of paper as they flip through their favorite novels, the trend seems to indicate that the convenience of having an entire digital library of millions of pages at your fingertips in a device as light as an iPad mini or a Kindle is more appealing.

In addition, the need to try out books in person (t) is low at a 2 out of 5, as evidenced by the number of large bookstores shutting down. Finally, Amazon/Kindle and other sources provide an excellent online substitute (an s of 5); contrast this with doctors, for example, where WebMD provides an online substitute that is only a 2 out of 5.

The book industry, then, has a local coefficient of 0.27 — a pretty low value on a scale of 0 to 1. Thus, you would expect the book industry to move online more quickly than other industries, and it is no wonder that Amazon chose books as its primary market to launch with in 1995. It is also natural that music followed, given that music also has a low local coefficient.

Table 1 – Local Coefficient By Industry

While the assumptions on e, t and s in Table 1 are debatable, the implication in Table 2 is pretty clear that the local market is going to stay larger than the e-commerce and online-only market for some time to come, even if the local market continues to become heavily online-influenced. Table 2 shows local being 3x larger, in fact.

Categories of products or services with a high local coefficient are going to remain as desirable in-person local experiences. We can confirm the results in the table above with intuition. Obviously, you can’t eat food over the Internet, so restaurants will always have a high local coefficient. Dentists, spas, and plumbers are all similarly high, with local coefficients of 0.87; you really need that in-person visit, and you probably want to meet the service provider before you buy. In addition, there really isn’t an e-commerce substitute for any of those categories (although if it could somehow be done, there would certainly be demand for an online dental cleaning, or better yet, an online massage).

Legal services is an example of a category that is somewhere in the middle: Talking to your attorney in person is very desirable for many potential customers, but ultimately the final work product often doesn’t require you to be there in person (unless the attorney does a bad job and you wind up in court!), and there is a decent online service substitute with LegalZoom and related services.

With clothing, there is at least a medium desire to try clothes on in a store, as fit is an important part of the selection process for many shoppers. In addition, there is not a clear online substitute to trying on clothes other than buying them and shipping them back and forth (e.g. Bonobos, Warby Parker and Zappos). Startups like Clothes Horse, Fit Valet, Metail, and Fits.me are all trying to create virtual clothing fitting rooms, but there is still work to be done.

Now we can construct an updated table with market sizes (M) for each category (click links for sources) and estimate the size of the steady-state, local brick-and-mortar industry (L * M) compared with how much will go online (O * M):

Table 2 – Market Sizes

The results in the table should be surprising for anyone who believes brick and mortar is dying: Even after we all become compulsive smartphone users who buy anything online whenever possible, the theoretical equilibrium of local commerce versus online commerce will be 3 to 1.

The opportunity for mobile and web companies now is in online-influenced commerce for these high-local-coefficient categories. Online-influenced commerce means that consumers want a mobile or web experience before, during and after going to a local business. Forrester Research sized online-influenced commerce as already over $1 trillion back in 2010.

Let’s take restaurants for example. For many of us, the ideal experience before going to a restaurant is going online to find somewhere great to eat and explore ratings, reviews and menus. Then at the restaurant, we want to look at review highlights to see what to order, as well as photos of dishes. After we leave, we might write a review and rate the business. This kind of online-augmented local experience is becoming so ingrained in our normal behavior that The Onion finds humor in suggesting someone might actually go to a restaurant without reading online reviews first.

You can also see that the categories with the highest local coefficients map nicely to the most popular reviewed categories on Yelp. This is no coincidence and is part of the same trend:

Reviewed Businesses by Category:

• Shopping & Retail – 23%
• Restaurants – 21%
• Home & Local Services – 11%
• Beauty & Fitness – 9%
• Arts, Entertainment & Events – 7%
• Health – 6%
• Nightlife – 4%
• Travel & Hotel – 4%
• Other – 11%

The next wave of innovation will be less about how to deliver an experience online, and more about how to enhance it. While the assumptions behind the local coefficient are subjective and can be debated, even if you make very aggressive assumptions, it is hard to make the calculations show that e-commerce will become larger than local brick and mortar in the foreseeable future.

My analysis resulted in brick and mortar being 3x the size of e-commerce, but you can probably find a way to get it to 2x or even 1.5x. But getting to 0.5x would probably stretch beyond the set of assumptions that a reasonable person would agree with.

Changes in society will occur in the coming decades that could make all the input variables shift, but it is hard to build a mathematical case that e-commerce will surpass local by the end of this decade. Entrepreneurs would be wise to focus on online-influenced commerce and how to create great experiences in that area.

Article courtesy of TechCrunch

Corning announced its quarterly results today, and the company beat Wall Street expectations despite a drop in quarterly earnings, thanks in part to a 14 percent year over year increase in sales. Sales for Q4 2012 topped $2.14 billion, with sales of Corning’s Gorilla Glass, the ultra durable material used in the construction of many smartphones and tablets including Apple’s iPhone and iPad exceeding $1 billion for the year.

Corning said the strength of Gorilla Glass sales helped drive its “Specialty Material” sales up 68 percent when measured year over year, and up 10 percent from the previous quarter. Corning reiterated that this reflects the over 1 billion consumer and IT devices that are now using Gorilla Glass as a key component. Corning is prepping new ways to exploit the success of its Specialty Materials division, including Gorilla Glass 3, which got a very dramatic debut at CES 2013 thanks to some stress testing that showed just how much stronger it is than previous iterations and alternate materials.

Another innovation from Corning is its work making new optical Thunderbolt and USB 3.0 cables that actually deliver on the promise of extremely long cable sizes that suffer no negative effects in terms of throughput speeds for data transfer. The optical cables aren’t powered, but they can do 10 Gbps (up and down, simultaneously) on Thunderbolt, and 5 Gbps for USB 3.0. These will likely be big sellers for professionals and advanced consumers who need to network an office or house but don’t want to the sacrifices in data transfer speeds that Wi-Fi entails.

Corning may face competition down the road from Samsung’s flexible displays, but it’s likely to see its fortunes continue to grow for the foreseeable future as mobile computing continues to trend upwards and more devices come to market.

Article courtesy of TechCrunch

iPhone-maker Apple’s share of the smartphone market will peak this year — at just over a fifth (22 per cent) of the global market, says analyst ABI Research. Apple’s share will then remain flat through to 2018 as mobile maker Samsung continues to dominate.  The prediction comes from ABI’s latest Mobile Handset Markets report.

“Barring an unlikely collapse in Samsung’s business, even Apple will be chasing Samsung’s technology, software, and device leadership in 2013 through the foreseeable future,” commented senior analyst Michael Morgan in a statement.

ABI notes that Samsung has grown its share of the global smartphone market from eight per cent to more than 30 per cent in 2012. The Korean mobile maker has leaned very heavily on Google’s Android OS thus far — Android currently accounts for 90 per cent of its smartphone shipments — but the analyst points out that the future smartphone OS landscape will likely be “heavily influenced” by how much Samsung decides to focus on other elements in its OS portfolio: namely its homegrown OS Bada; its open source collaboration with Intel Tizen; and Microsoft’s Windows Phone.

Samsung has recently been showing signs of wanting to diversify its OS distribution to reduce its reliance on Android. Earlier this month it confirmed it will be launching Tizen-based devices this year.

Elsewhere in the report, ABI notes that smartphone shipments will account for half of all mobile handset shipments by 2014 — going on to become the largest handset segment in the world. By 2018, the analyst predicts that 2.4 billion smartphone handset shipments will account for 69 per cent of all handset shipments. It says growth in smartphone shipment penetration will be driven by the “rapidly growing low-cost smartphone segment” — aka low-cost Androids — and forecasts that smartphones with wholesale ASPs under $250 will account for 62 per cent of smartphone shipments by 2018.

Meanwhile LTE handsets will account for just over a third (35 per cent) of all handset shipments and half of smartphone shipments in 2018 — making LTE the fastest-growing WWAN technology in history, according to ABI.

That’s not necessarily a sign of user adoption of LTE though; ABI observes that just because a phone has an LTE chip in it, does not mean its owner is making use of LTE. “With the successful launch of the iPhone 5 and competing LTE handsets from other leading OEMs, LTE handsets will be found in the hands of many consumers who do not even have access to LTE networks,” says senior practice director Jeff Orr in a statement. “Apple is demonstrating to the market that LTE is not the only reason to buy a premium handset.”

Article courtesy of TechCrunch

Our thirst for more Internet seems to be insatiable. According to the latest data from broadband network solutions provider Sandvine, fixed network data usage increased by 120 percent in the past year in North America. The average household now uses about 52GB per month, up from just 23GB last year. That’s about 81 hours of streaming video and unsurprisingly, Netflix is responsible for 33 percent of downstream traffic, followed by YouTube and regular HTTP web browsing traffic.

As the authors of the report note, real-time entertainment remains “the largest traffic category on virtually every network we examined, continuing a trend that we expect to observe into the foreseeable future.” While Netflix clearly dominates this category, it’s interesting how far behind Amazon (1.75 percent) and Hulu (1.38 percent) are.

As for upstream data, BitTorrent continues to rise in overall volume compared to previous years, though the report notes that its overall share of downstream and upstream traffic has declined a bit over the last couple of months.

One data point that stands out in Sandvine’s numbers is how quickly Apple’s PhotoStream has found its way into the upstream top 10. Apple’s automatic cloud photo backup is now the ninth-largest driver of upstream traffic.

With all of the increased usage, of course, the question of usage-based billing once again rears its head. In this context, it’s interesting to see that Sandvine’s data shows that the top 1 percent of subscribers who make the heaviest use of their broadband connections account for a whopping 36.6 percent of all upstream traffic. The lightest 50 percent of accounts, on the other hand, are only responsible for 5.2 percent of monthly traffic.

According to Sandvine CEO Dave Caputo there can be little doubt that usage-based pricing will soon become commonplace. “With a 120 percent growth rate there is no doubt that more communications service providers will be launching application-based pricing plans that provide cost certainty and a consistent quality of experience for high-demand applications.”

What About Mobile?

As for mobile data usage, Sandvine found only modest changes. Mean monthly usage is up slightly from 312.8MB per month to 317.2MB. Here, too, real-time entertainment is the largest traffic generator (mostly driven by YouTube usage), followed by web browsing and social network traffic.

Bonus: iTunes And Mac App Store Traffic

This is what it looks like when Apple releases an iOS update:

Article courtesy of TechCrunch

With its share price ailing, Facebook doesn’t want to flood the market with any more stock, so it has cancelled its secondary offering and will instead pay for taxes on its RSUs with cash as detailed in an 8-K filed with the SEC today. Also, CEO Mark Zuckerberg has informed the SEC he has no plans to sell any of his stock in the next year. Meanwhile, board members Marc Andreessen and Don Graham will sell some to cover taxes but beyond that “have no present intention to sell any shares”.

Along with allowing employees to sell stock two weeks sooner than the original November 14th lockup expiration date, today’s announcement will let Facebook get the lockup over with sooner, avoid a secondary sale or big shareholder dump from hurting its share price, and finally get back to business.

In Facebook’s original S-1, it had given itself leeway to sell up to 122 million shares to the public market in a secondary offering to pay for taxes involved in settling the distribution of pre-2011 RSUs. Later it planned to sell 101 million shares to cover these taxes. But now with its share price so volatile, it’s chosen to scrap the secondary offering and spend some of the $10 billion it raised through the high-priced and divisive IPO to pay these taxes in cash.

Zuckerberg’s commitment alone will ensure none of his “444 million shares of Class B common stock as well as 60 million shares of Class B common stock issuable upon the exercise of an option” will reach the market any time soon. He would need to file with SEC well in advance if he wanted to release any of his stake.

Meanwhile, after selling some shares to pay taxes, Andreessen will retain the rest of his 0.25% stake and Don Graham will keep the remainder of his 770,000 shares of restricted stock for the foreseeable future. And these pledges are likely not just some showy moves to stabilize the share price. It seems Zuck and the board members truly believe that if Facebook stays true to its mission and continues focusing on the user experience, they’ll see the company succeed and the share price climb in due time.

$FB did hit a new low at $17.55 earlier today before closing at $17.73 in reaction to news that an analyst from lead underwriter Morgan Stanley reduced his 12-month price target for Facebook by 16% from $38 to $32, and J.P. Morgan analyst Doug Anmuth dropped his target for the end of 2013 from $45 to $30 according to the Wall Street Journal.

But the 8-K was released just after the market closed, and the share price has rebounded another 1.98% up to $18.08 in after-hours trading as of press time, showing the 8-K’s announcements may already be doing their job of reassuring investors. Now the question will be how the market reacts when Facebook announces its third quarter financial results on October 23rd, and the sped-up employee lockup expiration hits on October 29th.

Here’s the full 8-K filed wit hhe SEC:

Article courtesy of TechCrunch

Workday, a company offering online tools for enterprises to manage human resources, payroll, and finances, just filed an S-1 form declaring its intention to raise up to $400 million in an IPO.

Reuters reported in July that the company had quietly filed for an IPO but was able to keep the documents secret for a while longer thanks to the JOBS Act. Now it’s official — the S-1 is online, and the details are out.

The filing says that in its most recent fiscal year (ending January 31, 2012), Workday brought in $134.4 million in revenue (an increase of 98 percent year-over-year), with a net loss of $79.6 million.

The company was founded in 2005 (apparently it first incorporated under the name “North Tahoe Power Tools”, which is awesome) by Dave Duffield and Aneel Bhusri, both former executives at PeopleSoft. They’re still the company’s co-CEOs, and the filing says they still control a majority of the voting stock. Investors include Greylock Partners and New Enterprise Associates.

Here’s how the company describes itself:

Workday is a leading provider of enterprise cloud-based applications for human capital management (HCM), payroll, financial management, time tracking, procurement and employee expense management. We achieved this leadership position through our innovative and adaptable technology, focus on the consumer Internet experience and cloud delivery model. Further, we believe we are the only company to provide this complete set of unified cloud-based applications to enterprises. Our applications are designed for global enterprises to manage complex and dynamic operating environments. We provide our customers highly adaptable, accessible and reliable applications to manage critical business functions that enable them to optimize their financial and human capital resources.

Among the risk factors listed on the filing is the fact that Workday has lost money every year, “and we do not expect to be profitable for the foreseeable future.” Many of the other concerns are pretty much what you’d expect from most companies in the enterprise software-as-a-service market — the “intensely competitive” industry, the risk of a security breach, the long sales cycles, and the dependence on third-party data centers. The company also notes that the majority of revenues come from its Human Capital Management application, rather than the full suite of products.

Article courtesy of TechCrunch

Early in 2011, upstream suppliers of displays and components let a few of Amazon’s secrets into the open, and these early, incomplete indications were actually on whole quite correct. Now we’re seeing more of the same kind of thing predicting the coming year’s announcements from Amazon, and the predictions seem just as reasonable.

The news is what you might expect: a diversification of the Kindle Fire lineup, with a focus on display quality — and presumably thrift, considering the series’ low price.

Supplier data, reported by China Economic News Service, points to the original 1024

Everyone likes to talk about how dependent Zynga is on Facebook, but that relationship cuts both ways. In the social network’s S-1 filing for its $5 billion IPO, Facebook says that Zynga accounted for 12 percent of its revenue in 2011, through a combination of virtual goods payments and advertising.

“If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected,” Facebook says.

Despite the fact that they clearly need each other (or maybe because of it), Zynga and Facebook have had rocky relationships in the past. Zynga has been trying to reduce its dependence by  pursuing with things like partnerships with other companies and by developing its own gaming portal. Still, it’s probably safe to assume that it will be pretty Facebook-reliant for the foreseeable future.

Article courtesy of TechCrunch

Mozilla, the maker of the popular Firefox web browser, has just released its annual State of Mozilla — an interactive web-based report that outlines the organization’s progress, and where it sees things going over the coming years. It also includes one key stat: Mozilla’s revenues for 2010 totaled $123 million, which is up approximately 18 percent from 2009. Mozilla generates most of this revenue through search partnerships (Google is the biggest contract, but it also has deals with Bing, Yahoo, and other providers).

Mozilla says that the Google partnership is up for renewal in November, and that it has “every confidence that search partnerships will remain a solid generator of revenue for Mozilla for the foreseeable future”.

The document doesn’t have too many surprises, but it’s a reminder that Mozilla — which has long been associated primarily with the desktop version of Firefox — is putting more effort behind new projects. Namely, it’s putting a much stronger emphasis on mobile, and it’s also looking to tackle various challenges on the web, like creating a decentralized web identity platform and improving both the functionality and discovery of web apps. And it’s also looking to protect user privacy, in part through the Do Not Track initiative.

The report makes a few veiled references to the growth of Google’s Chrome browser, which is set to overtake Firefox in market share after just three years on the market. Google has, of course, long been an advocate of the web, but Mozilla makes sure to point out that it alone among the major browser vendors is “organized solely for the good of the Web as a whole”, rather than market share and profits.

Some important passages:

Today we’re living more of our lives online than ever before. This gives Mozilla the opportunity to build freedom and user sovereignty into more areas of life. At the same time, advances in mobile technology move us toward several parallel worlds, each controlled by different giant commercial entities.

We have seen these kinds of threats before. Mozilla was born out of this type of environment, as a reaction to an online world that was full of promise and potential – but was then threatened by a few giant companies limiting consumer choice, interoperability and the overall health of the Web. We faced and won that challenge together then, and we need to face it again in this new era.

…

We also began including Android as a first tier platform along with our desktop platforms. This important shift has helped reinforce the expansion of Mozilla’s mission to the next phase of the Web. In this new setting, Firefox is not only a browser on your desktop but evolves to be a trusted environment where a user has a consistent set of core controls over his or her experience, regardless of device.

…

We currently have several key business partnerships and are actively exploring search partnership opportunities and other potential revenue opportunities. We’ll continue to build great products that help people enjoy the richness of the Internet, and we’re confident that this allows us to identify appropriate sources of revenue.

Article courtesy of TechCrunch