You seriously compared an iPod to Home Automation? Home Automation is not something you go to an Apple Store and buy. You don't just unwrap it, turn it on and BOOM! everything just works. You have to spend $10-$20K to hard-wire a house to one or more automation controllers first. Home automation has already existed for years in the form of alarms, motion sensors, thermostats. However, existing homes are a mish-mash of these things and what controller units they have would not talk a TCP protocol for controller via a mobile OS app.
Which is EXACTLY why there's room for Apple in this segment. I'm sure they won't solve the issues of getting your current stuff working together, but as always, stick with the Apple ecosystem, and "it just works". I'm also quite sure it won't work as well as a fully fledged, properly installed home automation system from AMX, Crestron etc, but I do think it could be the "Sonos of home automation".
BTW, did noone say "iBeacon" in this thread yet? Turning the lights on automatically when you enter a room is already a part of a well-designed home automation system. Doing this with iBeacons and a wearable device makes perfect sense.
Apple has the problem that they won't be able to make an iWatch or any other wearable device into an iPhone-sized market, and because of this they have a growth problem. A wearable device as part of a greater move into a bigger market segment however, that makes perfect sense. I think Apple has exhausted the possibilities of tapping into personal computing, and need to expand to different markets.