Open source hardware is hardware that is built based on principles analogous to open source software. That is, open source hardware typically come with original design files that enable people to study them freely, make changes and share those changes with others.
Open source hardware offers relatively inexpensive alternatives to their closed, proprietary counterparts.
Some good examples of open source hardware are Arduino boards. These boards are part of a complete open source electronics prototyping platform including a software development environment. A complete Arduino system is made up of both open source software and hardware. Because the supporting software of Arduino systems can be downloaded for free and the reference designs for the hardware are available under an open source license, people could easily create their own boards or build devices out of the Arduino software and hardware at a minimal cost.
Just like open source software (OSS), open source hardware uses licenses. A majority of these licenses are based on existing OSS licenses. Some of the widely used licenses for open source hardware include the TAPR Open Hardware License, Balloon Open Hardware License and the Hardware Design Public License.