The bigger story is that the very foundation of our future Internet of Things - software - is made of sand. Java and embedded system software such as Windows CE are rife with vulnerabilities. Even worse: manufacturers that are used to churning out dishwashers and refrigerators don't yet think of what they sell as "software" - they think of it as "hardware" even when software is running it. Hardware companies do repairs, not patches. They fix leaky hoses, not buffer overflows. It's more Maytag Man than Moxie Marlinspike. In other words: the list of companies that will have to climb the same, steep learning curve that Microsoft, Adobe and other companies climbed over the last decade will expand greatly. In the meantime, their customers .... consumers ... us ... will be in the cross hairs. The security firm Trend Micro has a great infograph that explains some of the risks that lurk in the "automated home of tomorrow." Among them: credential theft from e-commerce-enabled appliances like refrigerators and privacy violations or even phsyical harm stemming from compromised and Internet-connected home surveillance and security systems, or automobiles.
2) Clippy - EVERYWHERE!
One of the clear themes to come out of CES this year was the arrival (finally) of intelligent household devices. Everything from cars to kitchen appliances to watches and exercise machines are IP-enabled and equipped with remote sensing devices that allow them to observe their environment and then "act" on what they observe in some way. Your new, intelligent refrigerator, we're promised, not only lets you go shopping without leaving the kitchen, it keeps track of how old the milk is and will tell you when it has soured.
"What's so bad about that," you ask? I've got one word for you: Clippy. Remember Clippy, the helpful, smiling paperclip "assistant" that shipped with Microsoft Office? Clippy watched what you were doing - or at least what it thought you were doing - then "offered advice" to help you along the way based on some ham-fisted Bayesian algorithms.
What a great idea - in theory. In practice: Clippy was annoying as all get out. He popped up without prompting and at all the wrong times. His advice was pedantic and not helpful, and the processing power used just to stand him up slowed down Word and kept you from doing what you knew how to do all along. I don't know about you, but I still twitch when I start to type out a bulleted list, waiting for Clippy's cheery visage to appear.