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Makin' Money

New Blog! Comments, observations and insights from host Tess Vigeland as she prepares for each week's Marketplace Money show. Post your comments, too. Your ideas could end up on the air.

The Marketplace Reader

Wii have your technology

Motion sensor technology is one of the keys to Nintendo Wii’s success, but the world’s best-selling video game console could lose its title if its technology becomes more commonplace. And one Maryland tech company could bring an end to U.S. Nintento Wii sales. Hillcrest Labroratories claims it holds the patent for motion-sensing controllers, a key to the Wii system. Hillcrest filed a complaint with the U.S. International Trade Commission and has filed a lawsuit in federal court, asking it stop the import of Wiis to the U.S. Hillcrest makes its own motion-sensing controller for TV browsing and other purposes.

Bicycle roundup

Several days ago the Associated Press reported electric bicycles are selling well.

The surging cost of gasoline and a desire for a greener commute are turning more people to electric bikes as an unconventional form of transportation. They function like a typical two-wheeler but with a battery-powered assist, and bike dealers, riders and experts say they are flying off the racks.

And a former GM executive prognosticated on their popularity.

“The electric bikes are the next big thing,” said Frank Jamerson, a former General Motors Corp. executive turned electric vehicle guru.

The bikes may be doing well here, but they’re doing really well in Europe. Also from the Associated Press.

In the Netherlands, sales of electric-powered bikes increased from 45,000 in 2006 to 89,000 last year, according [sic] BOVAG, a motorized vehicles industry association, which expects that the meter will read 121,000 at the end of 2008.

That compares with an estimated 10,000 units sold across the U.S. in 2007, according to the Gluskin-Townley Group, which does market research for the National Bicycle Dealers Association.

The popularity is partly due to imports from China, where manufacturers are making very affordable models.

China itself is teeming with electric bikes. Even Pizza Hut delivers via electric bike.

The uptick in electric bike sales comes at a time when commuters are increasingly turning to two-wheeled transportation in general. Take note of a bike-share program — brought to you in part by outdoor advertiser Clear Channel — that launched in Washington, D.C. last week. From an article at WashingtonPost.com last Tuesday, April 12.

Today the city will join the ranks of Paris and Barcelona with the launch of the first high-tech public bike-sharing program in the United States, forcing such cities as San Francisco and Chicago to look here to see chic alternative transportation in action in America.[…]

SmartBike DC will rent 120 bikes at 10 self-service racks mostly in the downtown area, including near the Gallery Place, Shaw and Judiciary Square Metrorail stations. A $40 annual fee gets riders a membership card, which allows them to pick up a cherry red three-speed bike. Then it’s time to tool around the city for up to three hours. Those who want to keep going can pick up another bike; there’s no limit on the number of trips.[…]

In the United States, cities including Portland, Ore., and Austin have experimented with more low-tech versions, in which “beater bikes” were painted one color and made available for use. Most were vandalized or stolen after a short time.

Bicycle theft was also the reason the world’s first bike-sharing program, the “white bicycle” plan failed in Amsterdam in the mid-1960s. But that program, launched by a counterculture group called “Provo,” was arguably more successful than the group’s “white chicken” plan, which involved disarming the local police and transforming them into social workers “with candy and band-aids in their pockets.”

All this is a long way of saying that two-wheeled transportation is on the rise and may become even more popular when David Byrne of Talking Heads fame designs bike racks for your city.

Target adjusts its aim at market

From Advertising Age.

For years Target’s cheap-chic reputation has made it a darling of the fashion world and a favorite among shoppers of all stripes. But now, in the face of a tough economy, its well-cultivated image is turning away consumers who believe its trendy assortments and hip marketing mean steeper prices.

Treo has a new deal-o

Come on, admit it — the iPhone’s far from perfect. Given the slew of recent problems the technology has endured lately, it’s no wonder the competition is looking to retaliate. Competition like Palm Inc., which is releasing a second Treo to face-off against the smart phones iPhone and Blackberry and to boost itself up from four straight quarters of slumping profits. Some of its strengths include its small size and strong battery life, according to Palm’s product marketing manager John Walker. It also weighs as much as the new Blackberry Bold and is equipped with a touch screen.

The new Treo is being pitched towards business professionals and will be available in the U.K. starting next month.

Tire rolling resistance standards and your fuel efficiency

From Cindy Skrzycki’s business column at WashingtonPost.com.

Now, as gas prices have hit $4 a gallon and more, the idea of reducing tire “rolling resistance” to improve vehicle gas mileage is gaining traction. After 12 years of blocking any such standard, Congress has ordered a consumer information program by next year to inform buyers on what to expect from tires on fuel economy.

The $34 billion tire industry was long divided on the issue. Michelin North America has favored a standard and has started running ads extolling the gas-saving virtues of its tires. Other manufacturers lobbied Congress to block any rule requiring that tires be labeled to indicate their fuel efficiency.[…]

A 2006 study by the National Academy of Sciences concluded that it was feasible to reduce rolling resistance by 10 percent. This would increase the fuel economy of vehicles by 1 to 2 percent, saving up to 2 billion gallons of gasoline and diesel annually.

I wonder what the rolling resistance rating is of the square tires on this bicycle at Macalaster College.

Vioxx clinical study influenced by marketing

The painkiller Vioxx, which was found to double the risk of heart attack and stroke, has been off the market for nearly four years. This morning, a report on Vioxx published by the Annals of Internal Medicine has reached a startling conclusion. Merck’s original study on the drug’s side effects was done primarily to support a marketing campaign.

From Bloomberg.com:

The study, which recruited 600 doctors, was crafted by Merck’s marketing department to get physicians to prescribe Vioxx, the researchers wrote. The report provides some of the first evidence of what is thought to be a widespread practice: enlisting doctors for a study to boost their confidence in a new drug and get them to promote it to colleagues, they said.

The Advantage study “was marketing masquerading as science,” said lead author Kevin Hill, of Harvard Medical School in Boston, in an Aug. 15 telephone interview. “They went about this in a very analytic way, picking doctors who would be most influential, who will talk to other doctors and recommend Vioxx to them, and thus increase prescriptions in the area, planting the seeds of additional Vioxx use.”

Most startling quote to me: Jonathan Edelman, executive director of Merck Research Laboratories’ global center for scientific affairs, said: “As with all Merck clinical research, there is a commercial interest.”

We’re hearing about this about nine years after the first Vioxx trials. It certainly makes you wonder about the validity of other drug studies out there, and what kind of backlash we’ll see as a result of this one.

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Web Surfer: Items mentioned on air

Marketplace Confessional

"Of course everyone has their prerogative, but as for me the sounds of children are wonderful things. How dull and lonely it is without lively little ones running and jumping around. I believe this is another example of our culture's aversion to children and their vitality. Give them a pill and then they'll be quiet, or take a pill and then you won't have them, that's the philosophy. My wife and I have seven boys ages four months to 10 years. The days are filled with boisterous, and yes loud, thumping, bumping activity. However, without that, the silence would kill."

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