It's all about the software

With my first Nokia phone, I could punch in *#0000* and the phone would reveal the version of its internal software on the display. A friend who had bought the same type of phone was so annoyed that his phone's software was an earlier version than mine that he brought the phone back to the shop and asked them to upgrade it, causing a fair bit of confusion.
What astounded the shop attendants ten years ago is now commonplace and all kinds of electronic devices rely on software updates, typically distributed via the internet: Wireless routers, digital cameras, music players, televisions, even sport instruments like my scuba diving decompression computer.
The clever devices with which we surround ourselves rely increasingly on embedded algorithms. Cars are equipped with processing units that determine everything from the fuel/air combustion ratio to cabin climate. The competitive edge in hearing aids belong to the company that can develop the best signal processing algorithms. And content archive storage has progressed from being just lots of spinning disks to cabinets sporting their own operating systems ensuring built-in compliance with records management standards.
Solutions are being developed for systems, like those in cars, that do not frequently connect to the internet as part of the normal use cycle. USB keys are replacing cut keys and with them comes the opportunity to transfer software updates to the car's engine management system - as well as transferring mp3s to the music system.
Most device control systems are closed and proprietary. But what is the legal situation if the protection codes are cracked? Are there incentives to open up these systems and provide APIs? It would be exciting to see 3rd party solutions, as well as open source alternatives, enter the market and enhance the utility of things that just a few years ago were considered what-you-buy-is-what-you-get.