“Starting April 21, we will be expanding our use of mobile-friendliness as a ranking signal. This change will affect mobile searches in all languages worldwide and will have a significant impact in our search results.”
You probably heard that. As SearchEngineWatch nicely put it: “Mobilegeddon” is Coming on April 21st.
Google has started some times ago to provide useful information about how to better serve mobile traffic, it also revamped their help section making it rather good at addressing the different possible solutions: https://developers.google.com/webmasters/mobile-sites/mobile-seo/
I will not make a pro/cons list, but I will go straight to what I consider the major deciding factor in my opinion: backlinks.
The general consensus in 2015 is that backlinks are still the main driving force of SERP ranking, if you want to rank for a specific keyword, especially if it is a high competition keyword, you need a backlink profile supporting it.
For google http:/m.foobar.com and http://www.foobar.com are two totally different entities, a third level domain is not going to benefit from the second level domain backlink profile.
So, if you choose to serve a mobile friendly website to your mobile audience, and you plan to put the mobile version on a separate third level domain, you will have to start over your digital PR campaign and fight that battle again trying to get as many good quality backlink as you can.
Instead if you go responsive you do benefit from the existing backlink profile for the domain.
If you choose to go for the mobile site, what is the the risk of having the mobile version detected as duplicate content?
John Muller from google had clear answer to that, don’t worry if you followed google guidelines for mobile site markup. Google name for a mobile site is “dynamic serving”, and following google instructions will spare you from any duplicate content risk.
Last but not least, if you really prefer to go with a mobile site instead of going responsive, check your triggers, some mobile site are stubbornly refusing to serve pages to anyone but smartphones. Don’t be picky with your triggers: user-agent, screen width, and so on… Cross check that google mobile crawler can access the mobile version, or your entire mobile site could end being just no-indexed.