Math - my points are simple.
Summary: you have not identified a viable path to an Open Hardware market, or that one exists for the product you describe (beyond your own needs).
You have not identified a company which has built an Open Hardware business while surviving within a commercial environment.
The only company you have identified as successful, in a market related to the one you propose, is traditional and proprietary and not Open Source.
-I don't see that either Arduino or Redhat are examples of the approach you advocate:
They are not
So why even mention them?
You seemed to say that Redhat or Arduino looked impossible but succeeded, and if I have understood, that they prove that it can be done.
I think an evolutionary/Darwinian mind-set helps.
It is inevitable that we talk about the entities that succeed, because they are the ones we know. We shouldn't point to the survivors, and say "look they succeeded so that proves this other thing can succeed". That is a bit like saying "look at that fish, it neither drowns nor dissolves in the sea (both impressive feats), so this dog can do the same". We should never uncritically identify survivors as if they are evidence, while ignoring the legacy of all of the precursors. (Though this is how business "guru's" work, it isn't scientific)
From where I sat, it looked inevitable that someone would eventually figure out how to make money out of Linux. Some of the software was good (the best?) for some commercially valuable niches, and Linux provided low start up costs. I thought it might be IBM, or one of the hardware companies (HP, DEC, Dell, Compaq) because it would have synergy with their basis of profitable businesses. I couldn't pick the winner, but the outcome of profit from Linux seemed very likely.
I was not looking at low-end microcontroller hardware when Arduino started. I would have expected one of the chip makers to make an Open Hardware design, so it could be inherently profitable.
Further, just because Arduino have succeeded, I don't assume a "version 2" will be the right way to emulate or surpass its success. I can't think of many "version 2's" that are as succesful as the breakthrough orginal.
It does not amaze me that these sort of things succeed. IMHO that is the power of the 'Darwinism of market forces' in action. (We do need to recognise we may only become aware of a market after a winner emerges.)
It sometimes amazes me that people think "Open Source" is a magic incantation that allows something to be created apparently for nothing. The 'Darwinian eco-system' of Open Source is different from traditional proprietary business, but their are still constraints and evolutionary pressure.
I think LeafLabs are doing a very good job of operating under commercial pressures (i.e. outside of academia or a sheltering corporation) in Open Hardware, where some of the traditional Open Source assumptions break down.
I feel it is extremely useful to have debate about what commercial Open Hardware businesses might look like. But I think it is helpful to base it on carefully chosen, relevant evidence, unflinchingly identify the risks and limited success, and use real examples to inform the debate.
