This seems like the exact place where open source is a competitive advantage.
Step 1, open source your existing firmware for the previous generation hardware. The people who have the hardware now fix problems you didn't have the resources to fix.
Step 2, fork the public firmware for the previous generation hardware when developing the next generation. It has those bug fixes in it and 90% of the code is going to be the same anyway. Publish the new source code on the day the hardware ships in volume but not before. By then it doesn't matter if competitors can see it because "designs become obsolete very quickly" and it's too late for them to use it for their hardware/firmware in this generation. They don't get to see your next generation code until that generation is already shipping. Firmware tricks that span generations and have significant value can't be kept secret anyway because any significant firmware-based advantage would be reverse engineered by competitors for the next generation regardless of whether they have the source code.
Now your development costs are lower than competitors' because you didn't have to pay to fix any bugs that one of your customers fixed first, and more people buy your hardware because your firmware is less broken than the competition.