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Smart cars that keep themselves in the proper lane, maintain the correct following distance and sense driver fatigue are so passe. Now, thanks to researchers at Purdue University, your smart car can have smart tires. Reuters reports the net technology incorporates sensors that can detect problems like cuts, leaks, imbalance and improper mounting. A chip inside the tire probes the layers of the tire and relays information. The developer plans to patent the technology and license it to tire makers. He said it would cost the manufacturers about $1 per tire, but expects it'll add about $50 to the cost of a tire by the time it gets into consumers' hands. How smart is that?
15 Comments on “Smart Cars Need Smart Tires...”
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I can already detect imbalance and improper mounting. As for cuts and leaks, I thought that’s what TPMS already did.
The smart tire is supposed to be able to detect problems BEFORE a TPMS would.
I’m not paying $50 for what I can do myself with minimal effort. Might be good for my sister-in-law though.
Free Enterprise is anything BUT free, eh? Is that a 5000% markup?
Seriously, my car already has a couple of wheel imbalance sensors, I call them my hands.
This makes it seem as though the automobile is finally a fully mature product. when you have to go looking for problems to which you can apply solutions, you’re done.
David:
The problem is…how long till these tires, like TPMS, become mandatory, but with no extra funding from the fedgov to cover the extra cost?
Kevin Kluttz: Free Enterprise is anything BUT free, eh? Is that a 5000% markup?
I’ve heard that this is pretty typical on all sorts of goods that are imported to the U.S. from China. Those $100 Nikes supposedly have about $5 worth of materials and labor in them.
I wouldn’t pay for it.
OT: What happened to the latest Tesla threads? Somebody get served w/papers?
Free Enterprise is anything BUT free, eh? Is that a 5000% markup?
Remember the price of something doesn’t ever represent the cost, it’s supposed to represent the value to the customer. E.g., I have some software that I develop. It’s sold to both small research groups without much money and to _LARGE_ government agencies (think “global war on terror”). Obviously the budget (and hence the price willing they’re willing to pay) between the two groups is very different. We can’t afford to run the company only on what the research labs can pay. So we differentiate the product. The labs get the cheap version (thousands of dollars) but it only runs on 1 processor at a time. The governement gets the expensive version (millions of dollars), but it can run up to 4 processors at a time. You know what the difference is? One line that says MAX_PROCESSORS=1 or MAX_PROCESSORS=4. This way the free market can allow us to provide researchers with a valuable tool, but still be able to charge others’ enough so we can pay the programmers to make the stuff. (Guess what, there will be a super-duper-enhanced version next year for 8 processors, guess how much extra coding that’s going to take from me?)
So back on topic, with these tires, I’m sure its worth $50 to someone (in the name of safety) to have this. If not, then they’ll lower the price until they can sell enough to pay their development costs.
miked: right on.
Virtual Insanity : i was thinking the same thing. my brain just keeps saying “booster seats for 12 year olds…booster seats for 12 year olds…”
Ive heard that this is pretty typical on all sorts of goods that are imported to the U.S. from China. Those $100 Nikes supposedly have about $5 worth of materials and labor in them.
And that is exactly why they want to make everything in China.
The rubber that rubs off tires every day causes a lot of particulate pollution. They should work on a tire that doesn’t do that.
miked:
In a competitive situation, the price of a product should reflect its cost of production, which includes a reasonable return on the capital invested. Only in a monopoly situation can prices be geared towards the value each individual consumer, or class of consumers, places on the product, irrespective of the unit cost of production. This behavior, which you describe in your software example, is called “price discrimination.”
In your case, it is a perfectly legitimate monopoly behavior, because the patent and copyright laws give creators exclusive control over their inventions for a limited period, which means that they can market them like a good monopolist would (whether the never-ending extension of copyright protections — now near the century mark — violate the spirit of the constitutional clause enabling the Federal Government to protect copyrights is a discussion for another board).
Depending on the circumstances, that means price discrimination is a possibility. If price discrimination is not possible (because there is no way to target different categories of users), then the monopolist will just set production levels lower than a competitve market would, reap some monopoly rents, but the truly deep-pocketed customers who really need the product will end up paying less than their highest theoretical bid for the product, and will obtain some “consumer surplus” (the difference between what something is worth to the consumer versus what he actually had to pay for it).
The benefits of a competitive market are that price is lowered, quantity maximized, and thus consumer surplus is maximized. Justification for monopolies is that when upfront or R & D costs are high, while the cost to produce each individual unit is low, nobody would step in and make the upfront investment without some guarantee that he’d recover his money, and thus the product would never exist at all — a state of affairs worse than even a monopoly.
One way to practice price discrimination with the invention we’re discussing here would be to increase the cost of the system as the tires get larger, even if the production costs do not increase much (or at all) as the size of the tire goes up, on the theory that larger tires generally get put on larger, more expensive vehicles that get sold to richer, more free-spending types of people.
Someone buying tires for his Tercel might spring for this feature if it added no more than $10 to the cost of each tire (still above the actual cost, which is $1), while someone driving a Lincoln Navigator might pay $60 more per tire. Why make the premium over a regular tire a uniform $50, when that would lose the business of the Tercel driver while not soaking the Lincoln driver enough? Your profits would only be $196 under a uniform pricing plan, while under price discrimination they’d be $272.
Since this device is properly covered by a patent (I’m assuming), then this sort of behavior is perfectly legitimate for the life of the patent. One the patent expires, everyone and his Chinese grandmother will make these devices and the monopoly premiums will disappear in each market segment.