As hardware gets cheaper, more and more of the value comes from software and integration. That is the Apple strategy (keeping the Mac closed) and it is not Microsoft’s strategy with the X/Box. There is no room for open source in these models. The only way for open source to compete is to stay open from top to bottom and build an ecosystem around developers. This is a variant of the Clayton Christiansen thesis. As software and hardware get sufficiently cheap, value comes from integration.
Can open source compete with integrated hardware?