Is this the future of transport?

With one half of the world seemingly ready to bomb the other into oblivion, a global recession looming and climate change ready to flood out your long-term plans, what would you say the world really needs now?

According to Dr Dean Kamen, the answer is simple: his scooter. Except you must never, ever, call it a scooter. No, it is "the first self-balancing, electric-powered transportation machine", and it will "empower pedestrians" and allow them to reclaim cities from the deadly embrace of the cars that have overrun them. "Cities need cars like fish need bicycles," he told Time magazine this week. And he says that his latest invention – called the Segway – will make getting around cities so simple that cars will "not only be undesirable, but unnecessary."

The Segway looks like nothing more than, well, an overlarge scooter with the back end lopped off. But what it actually does is more subtle. By all accounts, it is a marvellous piece of technology. It is two-wheeled, concealing in its base a complex array of gyroscopes, computer chips and tilt sensors that monitor the centre of gravity of the person standing on its platform 100 times a second and which prevent you from tipping over, while moving in the direction that you're leaning. If you lean forward, it heads forward; lean back, and it stops. Those who have used it say that starting, stopping and turning quickly becomes intuitive; the Segway simply amplifies your intentions. Kamen calls the feeling "like skiing without the snow". And also, testers note, without the pratfalls.

It's quick too, with a maximum speed of 17 miles per hour (27 kilometres per hour). That's a good deal faster than the average speed of traffic around London. Is the Segway the product the world has been waiting for?

The first viewing came yesterday on ABC's Good Morning America and simultaneously in The New York Times and Time magazine. That followed months of silence from Kamen, after news of the Segway, then known only by its codename – "Ginger" – leaked in January.

The start of this year of course now seems like another age, when there was still life in the stock market and Osama bin Laden was just another anti-American extremist. Then, word of Ginger trickled out when Steve Kemper, a journalist, won a six-figure book advance from the Harvard Business Press to tell the inside story of its development. (Kamen is no longer co-operating with Kemper.)

At that time, it had been shown to few people. One was Steve Jobs, head of Apple Computer, whose eager (if ungrammatical) reaction was "if enough people see the machine you won't have to convince them to architect cities around it. It'll just happen." Another was Jeff Bezos, founder of the website Amazon, who laughed at the look of the machine but then, when he heard the concept, said, "you'll have no problem selling it. The question is, are people going to be allowed to use it?" The rumours took off. It was a Star Trek-style transporter. It was a hydrogen-powered car that would end our reliance on fossil fuels. It was a scooter powered by a Stirling engine (an efficient alternative to the petrol engine). It was an antigravity device.

But no, it's a scooter. Sorry, self-balancing electric-powered transportation machine.

For some, the revelation to follow the hype has been a disappointment, to which Kamen responds "So it won't beam you to Mars, or turn lead into gold. Sue me." Nonetheless, an interesting question lingers: has the Segway arrived at the right time to transform our cities, and perhaps those of the future in developing countries such as China, so that cars will no longer get priority over pedestrians?

"Most people in the developing world can't afford cars, and if they could, it would be a complete disaster," he told Time. "If you were building one of the new cities of China, would you do it the way we have? Wouldn't it make more sense to build a mass-transit system around the city and leave the central couple of square miles for pedestrians only?" And Segways, of course.

It's tempting to write Dr Kamen off as another inventor with another wild product. But this is a man who has grown rich by producing things that people need and pay for. An aviation enthusiast who lives in a hexagonal house with two helicopters in the garage, he is known for his love of wearing denim. He is a friend of President Bush, and one of his inventions – a cardiac "stent" that improves blood flow – helps keep Vice-President Dick Cheney alive. He dropped out of university in 1976, aged 25, to form his first corporation – and in 1978 demonstrated the first portable infusion pump able to dispense insulin and other drugs, allowing patients to get out of hospital despite needing round-the-clock medication. In 1982 he sold the product rights, making him an instant multi-millionaire. In 1993 he developed his second winner, a portable dialysis machine weighing just 10kg (22lb); it won design awards and he was awarded the Hoover Medal, given for "inventions that have advanced medical care worldwide". In 1995, he unveiled a robot wheelchair, the iBot, which can climb stairs.

Project Ginger came out of the iBot work: during development he was so keen about its smooth, self-balancing ascent of stairs that he and his co-workers began referring to the iBot as "Fred Astaire". So when he wanted to produce a partner to it for getting around city streets, what better codename than Fred Astaire's film dance partner, Ginger Rogers?

Now that Segway has been unveiled the criticisms have started coming thick and fast. It "overlooks one of the most critical reasons people use their cars in cities: schlepping," noted Denise Caruso, an occasional columnist for The New York Times. "I don't ride a bicycle in San Francisco because I carry my laptop and usually a bunch of reading material (read: heavy, somewhat bulky), and often a lunch, between home and office every day. It's literally a five-minute commute by car, probably a 15-minute bike ride but still, strapping that stuff all over me so I can bike to work is completely impractical (and unsafe) under these very common circumstances. And I'm a mild case, schlep-wise."

Without any sort of storage built into Ginger, and with no easy way to carry things "I don't see how it can catch on in a big way," she commented when news first emerged yesterday.

Other criticisms are easy to add: you can't stick a couple of children in the back and do a school run, it's hard to put a week's shopping in the back, and you're going to find it hard to lock it as securely as a bicycle to a lamppost.

There's the price tag for the smallest version – $3,000 (with larger versions, which will be able to carry luggage, costing $5,000 and $10,000). That's hardly pocket change in recession-hit America. And there's the weight: at 65 pounds (30kg) it is hardly the sort of thing that you want to be lugging up or down stairs.

Furthermore, will pedestrians really tolerate them on pavements? Or will they be forced on to the roads, to fight it out with the cyclists, motorbikes, cars, white vans, lorries and buses?

But Kamen has his responses worked out. He often sounds like he is no fan of cars. "Cars are great for going long distances. But it makes no sense at all for people in cities to use a one-tonne piece of metal," he says. He has already persuaded the US Post Office, the National Parks Service, General Electric and Amazon.com to buy some. Parcel carriers such as Federal Express have also been shown the Segway, and expressed interest. Ultimately, he wants to go after the consumer market. But is the world willing to change to accommodate him?

Bicyclists and scooter-riders are hardly welcome by pedestrians on pavements now. Transport 2000, the pressure group for environmentally-friendly transport, is lukewarm. "I wonder whether people would take to that form of transport," said Steve Hounsham, the group's spokesman. "There have been lots of other transport inventions which didn't get anywhere. The Sinclair C5..." But that electric-powered vehicle was doomed by the fact that one had to ride it, lying almost prone, on the road, a perfect target for annoyed lorry and car drivers. "There's the Sinclair Zeta [a battery-powered addition for bicycles launched in 1991]," he adds. "But I've never seen anyone using one.

"One has to ask whether this makes a realistic contribution to cutting traffic," continues Hounsham. "I think that we're more likely to see conventional alternatives to the car, such as cycling and public transport. And the price is significant."

That's echoed by another analyst. "It's about $2,000 too expensive and 40lb too heavy," notes Paul Saffo, director of the Institute of the Future in Menlo Park, California. The price will fall with volume production. But it will have to fall a long way to really become as affordable as a bicycle or a scooter.

Certainly, Kamen was sounding determined – but a bit gloomy – ahead of the launch. "There is no question in my mind that we have the right answer," he told Time. "I would stake my reputation, my money and my time on the fact that 10 years from now, this will be the way many people in many places get around.

"If all we end up with are a few billion-dollar niche markets, that would be a disappointment. It's not like our goal was just to put the golf-cart industry out of business."