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The thought-model for future interconnection environment was proposed in 2004.

The model includes the notion that the ternary universe consists of the physical world, virtual world and mental world and a multi-level reference architecture with the nature and devices at the bottom level followed by the level of the Internet, sensor network, and mobile network, and intelligent human-machine communities at the top level, which supports geographically dispersed users to cooperatively accomplish tasks and solve problems by using the network to actively promote the flow of material, energy, techniques, information, knowledge, and services in this environment.

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For example, such technology could grant motion-picture publishers much more control over end-user private devices by remotely enforcing copyright restrictions and digital rights management, so the ability of a customer who bought a Blu-ray disc to watch the movie could become dependent on the copyright holder's decision, similar to Circuit City's failed DIVX.

A significant transformation is to extend "things" from the data generated from devices to objects in the physical space.

Ease of usability is the most immediate benefit to connecting these functionalities.

Long term benefits can include the ability to create a more environmentally friendly home by automating some functions such as ensuring lights and electronics are turned off.

These users could then be provided with special offers on their favorite products, or even location of items that they need, which their fridge has automatically conveyed to the phone.

A growing portion of Io T devices are created for consumer use.

Large smart home systems utilize a main hub or controller to provide users with a central control for all of their devices.

These devices can include lighting, heating and air conditioning, media and security systems.

Examples of consumer applications include connected car, entertainment, home automation (also known as smart home devices), wearable technology, quantified self, connected health, and appliances such as washer/dryers, robotic vacuums, air purifiers, ovens, or refrigerators/freezers that use Wi-Fi for remote monitoring.

Io T devices are a part of the larger concept of home automation, also known as domotics.

George Osborne, the former British Chancellor of the Exchequer, posited that the Internet of things is the next stage of the information revolution and referenced the inter-connectivity of everything from urban transport to medical devices to household appliances.

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