Launched last September, the New York-based startup has developed a system of tiny, electronic modules that snap together to make simple electronics projects. The company on Wednesday announced that it has raised $3.65 million in new funding and forged a critical partnership with supply management company PCH International, which will start producing littleBits in August. The Series A financing round was led by True Ventures (see disclosure below) and included Khosla Ventures, O’Reilly AlphaTech Ventures and Lerer Ventures.

So far, the company has mostly sold to individuals through its website, but founder and CEO Ayah Bdeir said the new partnership with PCH International will let the company quickly ramp up production to fill individual web orders, as well as distribute to schools and toy stores.

“We really want to get kids thinking differently about electronics and engineering and technology very early on,” she said. “But I also think we have the opportunity to change the way the toy business operates. Instead of toys being very limited and restricted in what they can do, we can really bring back this idea… of science kits.”

As of now, the company sells 28 individual bits and two kits, which include a selection of different bits. Each bit falls into one of four categories (power, input, output and wire) and serves a unique function, from generating power and sensing surrounding light to buzzing and flashing a light. With those bits, people can exercise their inner inventors and assemble (along with other basic materials) all kinds of things, from an interactive piggy banks to a light up Halloween pumpkin to a sound-triggered bubble maker.

The prices range from $10 for one bit (although bit prices vary depending on their function) to $89 for a kit, which seems a tad steep. But Bdeir said the company wants to make littleBits affordable, so it’s possible they could explore other payment models that make the price more appealing to an average consumer.

With the new funding, Bdeir said they plan to expand the product line with more bits and kits, including specialty kits that can be more mechanical or sensor-based or better suited for younger kids. The company also intends to add as many as 20 new hires in New York by the end of the year.

As the company takes on the toy market, Bdeir, who is an alum of the MIT Media Lab, said her inspiration is Lego.

“[They’ve] really been able to enter every household at a very young age and continue to be something you play with as you get older,” she said. “You have a long lifetime for the product or toy and it’s actually providing value at a very real level.”

Disclosure: True Ventures is an investor in littleBits and the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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The company, which uses 3D printing to let people turn their personalized digital avatars into custom-made real-life dolls, quietly launched in alpha a couple of weeks ago. And now it’s announcing a significant round of funding to help it transport the toy industry into the next generation.

“We’re making toys using game data and 3D printing,” explains Alice Taylor, Makielab co-founder and CEO. “We call ourselves a smart toy company, and for us that means there’s a digital side to it by default.”

The company slogan is “the action doll you design”, and here’s the concept in a nutshell: you hit the Makie website and create your own avatar, choosing from a range of shapes, sizes, features and outfits — the kind of thing that’s recognizable from all kinds of MMOs, virtual worlds and kids’ games. But then comes the magic: press a button and you get your digital figure turned into the real thing, produced as a one-off in bone-white plastic using cutting edge manufacturing techniques.

The alpha is essentially selling a limited batch of dolls, each costing £99 ($150) — which means it is a proof-of-concept largely aimed at adults. But Taylor is adamant that they’ll reach kids as soon as it’s possible. To that end, over time the company hopes to bring down the price as its sales increase, perhaps introducing a £50 ($75) version aimed at children and a higher-end version costing £150 or more for hardcore toy collectors.

And getting from the basic product towards the mass market is what the money, which comes from Nordic VC funds Lifeline Ventures (Thinglink, Ditto) and Sunstone (Gidsy, Podio) — as well as a trio of angels — is being used for.

The first Makies are reaching customers now, says Taylor, and feedback has been good. But while buyers seem to be intrigued, she admits that right now the company exists in a fairly tricky space — it’s not quite a toy company, not quite a games company, and not quite a web business. Instead, it’s a hybrid of all three, with a little bit of weirdness thrown in for good measure.

“I look around at toy production and it’s so different to what we’re doing,” says Taylor. “In the traditional toy industry it takes years to go from having your prototype to going on sale.”

“We had to get the physical stuff out of the way, because nobody had done it before. You can’t learn how to make 3D printed toys from somebody, because it’s new. So you kind of have to roll your sleeves up and learn, regardless of whether you’re us or a 20-year toy industry veteran.”

She says that over time the business will roll out more — for example, more customizable options, more clothing and garments, more game elements that give rewards to players who invest more time and energy in the product (you have to reach level 20 before you can get a crown to your Makie, for example). And then? Well, it’s just the first step.

“We have technology that could apply to lots of different types of toys, but right now we’ve got enough to build Makie,” she says. “I’d love to be here in 50 years time, the same size as Lego.”

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However, that fun comes at a whopping $129 price per ball, which I’m not going to shell out for a toy. But, for those with deeper pockets than I, it does have several apps/functions, such as Drive (you move your finder on an iPad or smartphone, and the ball moves too!), Chroma (a game that uses the accelerometer in the ball and asks you to tilt it in the direction of whatever color is flashing on the screen) and my favorite, MacroLabs, which is essentially a way to program the ball and then watch it take the actions you described.

Here’s my crappy video of the Sphero on the floor of the Hilton here at SXSW:

I’m genuinely intrigued by the way connected toys can change how people play and interact with one another. Sphero, which is made by a Boulder, Colo.-based firm called Orbotix, seems to me to be limited right now because, while it’s pretty, it doesn’t offer anything fundamentally new in play. The Chroma game is similar to some bad Wii game, and driving it around doesn’t hold my interest for long. However, I like the idea of a ball with Sphero’s capabilities that one can write apps to — and there is a software development kit.

Building a platform so people could envision games for their Sphero and build them is super powerful and may be why Highway 12 Ventures and Foundry Group invested in the company making Sphero. MacroLabs might become that, but I’d want multiplayer functionality. With something like that, perhaps I could build the next Calvinball.

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I asked Matt Webb, the company’s CEO, what’s occupying him right now, and he said BERG is trying to balance client work (including projects for the BBC, the U.K. government and Japanese ad agency Dentsu) while trying to build out its own products, too.

“One of our own projects goes to market really soon, which is exciting,” he explains. “It’s called SVK, and it’s a comic we’re publishing, written by Warren Ellis and with art by Matt “D’Israeli” Brooker. It’s a cracking detective story, and it’s partially printed in invisible ink. The comic — it’s a physical comic — comes with an ultra-violet torch so you can read the hidden parts.”

Producing a piece of paper-based fiction is, perhaps, an unusual turn for a team better known for its grasp of technology. Given that the team loves comics, loves playing around and making toys, and seems to be part of a constant performance about inventing the future, then it could all look like a grand indulgence. But, says Webb, aside from these personal reasons, it’s actually a project with an ulterior purpose: to learn how to build out manufacturing and distribution.

“What we’ve got ready is a warehouse, pick and pack, and a web shop — all automated processes and ready to be filled with inventory. It’s neat, because this is where product is going: You have to own your own distribution if you want to provide a great end-to-end customer experience.”

He adds that this end-to-end handle on commerce is ripe for innovation and reinvention for practical reasons.

“If you own your own distribution, you can afford to spend more on making a quality product instead, made for a smaller number of more discerning people. You avoid the trap of needing a hit that sells millions and millions of something — but spending most of that on marketing and distribution, and having a bunch of failures — which is the trap I believe a lot of big mass manufacture companies are in. ‘Product’ will be reinvented, just as music and media were reinvented by iTunes and blogs: there is a world appearing in between the big guys and the little hobbyists. The middle is getting filled in.”

To get an idea of what he’s talking about, perhaps it’s worth examining how BERG’s process of inventing new products happens. BERG’s raison d’etre is, ultimately, “design fiction:” stories or narratives about how future products would work, often delivered through short films or talks.

Introducing Suwappu! from Dentsu London on Vimeo.

Webb says the starting place for those stories has changed radically.

“If you look 50 years ago, or 100 years ago, the technology in our homes was the offcuts of the military, or of factories, of industry. Look at computers, which came in equal parts from the need to calculate ballistics in the world wars, and from Silicon Valley, which was at the heart of Cold War investment into space and rocketry. Or mobile phones, which came from battlefield communications. Or even dishwashers and washing machines, which were spin-offs of technology originated in factories.”

“Now you look, [and] the bleeding edge of technology in the home originates from consumer use. The iPhone is better than anything the military ever made. Toys are a great place to look for the latest technology. And even computers, which used to be driven by office use and mainframes, are now led by the nose by technology in personal tablets and laptops, used for games and consuming media. So we’ve flipped from the industrial to the domestic.”

This is something he thinks holds great possibility for all kinds of new ideas to rise to the surface.

“Although Apple has done enormously well on this flip — that is, the iPhone and iPad — I don’t believe this change has been fully understood or fully taken advantage of. We’re surrounded by these behemoths of mass consumption, mass production, mass media — and they’re all artifacts of an age of economies of scale, and margins measured in fractions of cents, and advertising at grand scales. These industrial assumptions no longer hold, and all kinds of new opportunities are opening up. So for me, I’m thinking about the home, and about short-run manufacture, and about robots, and about technology used by small social groups like families. How do we visualise and design for all of this? It’s all good fun.”

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Just when you thought the weekend couldn’t get any better, along comes a selection of the freshest picks from the App Store.

This week I’ve selected four playful picks for you to toy with over the weekend. It’s not all fun and games, though, as before we get to the apps, I’ve got a roundup of the week’s news.

Another week closer to the release of the iPhone 3.0 update means another leaked addition to the new OS. This time, Apple is bringing video purchasing to the iPhone. All well and good, but I can’t imagine how downloading a 2GB movie is going to work over 3G.

Our own Nick Santilli procured a selection of apps that raise the potential for photos taken with the iPhone’s camera. It’s essential reading for iPhone owners who are disappointed with the device’s awful camera. My pick of the bunch is QuadCamera — it makes shooting with the iPhone fun again.

The iPhone made the front cover of The New Yorker this week, though not in the way you might expect. Using Brushes, a cute little painting app for iPhone, artist Jorge Colombo created the cover illustration for the latest issue. Brushes isn’t exactly a pro-level art package, but it can generate stunning results — budding artists can grab the app for four bucks (it’s currently on offer) and start practicing now.

Tweetie for Mac, the excellent older sibling to the iPhone Twitter client Tweetie, received a fun little upgrade this week. The app now allows video tweeting, via the iSight camera or a quick .mov file drag ‘n’ drop. This article is particularly worth checking out because you get to watch a Twitter video of me, playing Sigur Rós, on the glockenspiel — blog-based musical interludes do not get better than that.

And finally, there could be an Apple game console on the incredibly distant horizon. This is according to the CEO of gaming giant Ubisoft. Frankly, I don’t see it happening, but then who am I to argue with the CEO of the company that brought us Splinter Cell and a refreshed Prince of Persia franchise?

Moving on to the picks, this week I’ve been looking at Space Ace, Light Wars, BeatRider Touch and Drum Tracker.

Space Ace ($4.99)
A quick refresher for readers who may not have come across Space Ace — the game is a gorgeously illustrated animated adventure from the folks behind Dragons Lair. Those who remember the original will be pleased to note that, visually, it’s still as vibrant as ever; however, it’s also just as frustrating in terms of gameplay. The game is essentially one long animation in which you just perform the correct actions at the correct time to keep the story moving forward. Frequently silly, regularly annoying, but it’ll have you coming back time and time again.

Light Wars (99 cents)
One glance at this game and any seasoned gamer will tell you that it’s a direct rip of Geometry Wars — an excellent console mini-game that brings classic messy shoot-em-up Robotron to mind. Light Wars is incredibly fast-paced and frenetic, throwing tron-style nasties at you from all angles as you speed across the vector map, dodging enemy ballistics and racking up insanely high scores. Currently on sale at 99 cents and definitely worth checking out for fans of arcade-style shoot-em-ups.

Beatrider Touch Lite (FREE)
Tap Tap Revenge may be the current king of rhythm-action games on the iPhone, but that shouldn’t stop other titles from trying to topple the game from its well-earned throne. Beatrider Touch incorporates more sliding than tapping, plus it brings something entirely new to the genre — song uploading. Upload your favorite tune and you’re able to play it as a level in Beatrider. The free Lite version supports one song upload, the premium version — retailing at five bucks — lets you upload up to 20.

Drum Tracker ($1.99)
If you’re not in the mood for gaming, but beats are your thing, then Drum Tracker may be the app for you. The developers, a team calling themselves Simple is Beautiful, have squeezed a fully-featured drum machine down into one gorgeous-looking iPhone app. This is a tool that, while it could be tons of fun for anyone looking to toy around with a few beats, could prove useful for electronic music producers on the go. Worth checking out for the more musical readers of TheAppleBlog, especially as it’s priced so competitively for a sound app.

That’s all the picks for this week. I’ll be back in seven days with more news from the week and picks from the App Store.

In the meantime, what apps have you been using this week?

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Imagine having a robot that carries your iPod, dances, and chases you around the house? Almost sounds as though you’ve stepped into the future where robots rule. If you like gadgets check out the one Sega-Hasbro has created. It’s an A.M.P (Automated Music Personality) or Ampbot. In other words it’s a musical robot.

The Ampbot was recently released at the Tokyo Toy Show. It’s not a new concept Sega Toys has released similar devices over the years; however, none of them have been as advanced as the Ampbot.

Ampbot is 2.4 feet tall two-wheeled wonder. It features a MP3 cradle on its back. It’s a perfect place to store your iPod. What’s interesting is that Ampbot will follow you around. Osamu Takeuchi of Sega Toys says, “The owner can also enjoy being chased around the house by the robot.” Oh great, my dogs and ferrets already do that now I have another shadow. Somehow the thought of a 2.4 foot robot following me around the house isn’t appealing. I know my five-year old daughter would get a big kick out of it, however after the novelty wore off she would be trying to figure out a way to get it to stop following her.

If you successfully escape Ampbot’s stalking, you’ll still hear your music blasting from its speakers. Which is a good thing it’s the reason you bought it in the first place, right? So it can play music stored on your iPod, right?  Ampbot comes equipped with 5-inch mid range speakers that are located in its chest. You’ll also find a pair of small tweeters located on its shoulders giving it a total output of 12 watts.

The Ampbot needs a lot of juice. Be prepared to stock it with 6X D and 3X AAA batteries. I would suggest investing in  rechargeable batteries so you don’t have to keep purchasing them? That’s what we use in my home. The batteries will give you about 10 hours of continuous music.

Ampbot will make its appearance in November 2008 just in time for Christmas. Cough up $500 and the musical robot is yours.

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