The NYT had a great piece over the weekend on the explosion of Internet-connected regular device that made a compelling argument for why we are effectively squarely in the middle of the gimmick phase of it with companies connecting a variety of devices that don't really merit being connected and the result being confused users and ridiculous displays of technology for its own sake being put on by retailers like Target. It's really a fun read.
To me the IoT in the home is really about being able to control major pieces of home functionality in useful ways, at first through the smartphone and eventually hopefully in concert and automatically based on variables like presence and time of day. There is also a small niche for being able to measure particular aspects of a home's existence: energy consumption being the big one a number of companies are focusing on though the benefits here accrue less to the consumer than to the provider as I'll explain in a moment thus really limiting the market opportunity.
However, beyond control of the big things: HVAC, lighting, media and entertainment, it seems like the main use cases are around providers looking to put what are effectively subsidized vending machines in the home— where the subsidy comes straight out of the consumer's wallet. Witness the excitement around the [Amazon Dash] (automatic reorder of consumer staples) buttons as a great example. Some of these may be useful to the consumer but are really quite valuable to the merchant, energy provider or insurance company. And as such they should probably come free for the end user.
For the rest, I expect a lot of IoT home carnage in the consumer market though I hope to be surprised by additional high value control use cases that are not clear as of today.