Toyota Versus Bill Gates

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Microsoft (Nasdaq: MSFT) leader Bill Gates -- the man everyone loves to hate, who runs the company everyone loves to hate -- once famously said: "If GM had kept up with the technology like the computer industry has, we would all be driving $25.00 cars that got 1,000 miles to the gallon." To which GM (NYSE: GM) offered an equally famous rebuttal (click here to read it in full), pointedly criticizing Microsoft's habit of "rushing to market" half-finished products without regard to whether all the kinks had yet been worked out.

However, today's article is not actually about either GM or Microsoft -- it's about Toyota Motors (NYSE: TM). Last week, Toyota took the kind of action that would be just about unthinkable to a damn-the-quality, full-speed-to-market company such as Microsoft. Last week, Toyota purposely decided to hold up a product launch to ensure the product was up to snuff before it went on the market. Its long-awaited RX 400h (the hybrid version of the popular Lexus RX 300), which was planned to begin U.S. sales in the fall, will not go on the market until February or March 2005.

Now, we've written here often on the Fool about the budding war for fuel-efficiency-conscious customers among the automakers: about the mounting consumer demand for the products; Nissan's (Nasdaq: NSANY) response to that demand; Honda's (NYSE: HMC) recent quality missteps; and most significantly, the likelihood that Ford (NYSE: F) will become the first company to market a hybrid SUV.

This is a battle that must be won, or at least fought, for any car company that wants to remain relevant in the current high-priced-gasoline era. Which creates an obvious incentive for each company to "rush to market" a hybrid -- any hybrid -- to grab some market share before it is too late. And Toyota's market share will almost certainly suffer when it cedes to Ford the first-mover advantage in marketing a hybrid SUV.

Which is exactly the point. Toyota is willing to let someone else be first in order to ensure that Toyota will be best. It will use the extra months to make sure the SUV is working in "perfect order" (Toyota's words, my emphasis) before releasing it. And it will build up inventory to ensure that once the SUV does go to market, there will be enough to go around. That's the kind of devotion to quality, and to customers, that Microsoft has never really understood.

Fool contributor Rich Smith owns no shares in any company mentioned in this article.