Cisco Launches Alliance For the 'Internet of Things'
Yannis B. writes "This week, a group of leading technology vendors that includes Cisco, Sun, Ericsson, Atmel, Freescale, and embedded open source developers, founded the Internet Protocol for Smart Objects Alliance to promote the 'Internet of Things,' in which everyday objects such as thermometers, radiators, and light switches are given IP addresses and are connected to the Internet. Such IP-enabled 'smart objects' give rise to a wide range of applications, from energy-efficient homes and offices to factory equipment maintenance and hospital patient monitoring. For Slashdot readers who are interested in the underlying technology, a white paper written by well-known embedded open source developer Adam Dunkels and IETF ROLL working group chair JP Vasseur establishes the technical basis of the alliance (PDF)."
making cheap Wi-fi chipsets is the answer here
If you read the announcement, you'll find that the major benefit of using a layered architecture such as IP is the ability to use different physical media, depending on the application.
For short-range applications, there are technologies that are both cheaper and more power-efficient than wifi. Off the top of my head, there's Zigbee, Bluetooth and probably lots of others.
And for even lower range applications, nothing beats the cost of an infra-red diode.