With regards to cell phones, open source bears a number of advantages and disadvantages, both for the cell phone carriers and to the consumers.
Currently, most operating systems that run on cell phone are proprietary to the company that manufactures them: there are precious few third party operating systems out there. There is little room for open source alternatives to come and pry a place for themselves on the market.
The most distinct advantage for cell phone carriers is the small size of Linux and Linux-based operating systems, as well as their efficiency. Windows-based and other operating systems for cell phones have come under a fair bit of fire for their slowness and bugginess, and to some, open source seems to supply a way out of that mess.
However, this is more than a story of efficiency. One of the major differences between the proprietary and open source models is how development proceeds. Under the open source model, it is a mass, grass roots endeavor, with some centralization under project managers and the like, but is largely unpredictable and difficult to control. Not exactly the stablest premise, coming from the traditionalist camp: it'd be a huge upset, and mobile companies just aren't comfortable with that. Change is dangerous, even if theoretically it's for the better—and even if it's synonymous with innovation.
In the words of one commentator of this vein: “Linux the OS— the kernel, the memory manager— is attractive to phone manufacturers, Linux the philosophy— users banding together ad hoc to create new things— is anathema to wireless carriers.” So, it is argued that the open source model that does work for cell phones is not the one elevated by idealistic open source advocates.
How this will all spell out is anyone's guess. Without further ado, some current open source cell phones: