The latest La-Z-Boy recliner chair comes with a 10-motor massage and heat system, a refrigerator that holds a six-pack, and a telephone that features Caller ID. Called the Oasis, this recliner contains so much processing power that there is serious risk that today’s couches may be smarter than the potatoes occupying them.

This is just the tip of the digital-home iceberg. Engineers everywhere are producing an array of exotic devices that, like the La-Z-Boy Oasis, include features just because they are possible. As the digital revolution comes home, most firms eager to cash in on the phenomenon have miles to go if they want to design hot products that are truly relevant to regular Joes and Josephines.

Just look at the list of gizmos that designers say every well-equipped home will soon have:

Temperature sensors that automatically regulate the internal temperature based on conditions outside.

Media rooms stuffed with high-speed Internet and communications equipment, DVD players, video-game systems, and wiring closets.

Data rooms that store and back up the data and the software for all home gadgets.

Automatic pet doors that open for family cats or dogs but not for other animals.

Garden sensors that sprinkle water and spread fertilizer when it is needed.

Driveway sensors that detect the arrival or departure of a visitor.

Remote managers that handle computers, sensors, lights, and appliances from afar, electronically.

Motorized curtains that open for pets and plants on sunny days and close for privacy.

External sensors embedded in roof shingles and house siding to detect leaks, water buildup, and pests.

We also are told that any day now "fat pipes" will burst through our home walls to let us send and receive a deluge of data. Using this profusion of bandwidth, companies will pump in games, power distribution and management services, security systems, new phone services, home delivery services, lawn care, and every conceivable other type of home service.

In the meantime, household devices such as our rice cookers, bread makers, phone answering machines, and televisions are being given all sorts of exotic but confusing new features—for instance, exercise bikes that show video of terrain you aren’t traversing. At a much larger level, people have started building fantastic "houses of the future." The over-the-top nature of this trend is epitomized by Bill Gates’s $97 million, 66,000-square-foot bungalow, replete with indoor heated parking for 300 cars, and paintings and music that change to your preferences in each room you enter.

Dazzling scenarios for the future are presented with breathless fervor. Yet anyone who looks at decades past instantly notices that predictions such as these tend to be utter nonsense. Indeed, many of today’s predictions have been around for dozens of years without moving any closer to reality. One example: Futurists have predicted the arrival of the personal aircraft since the 1940s—yet it is now, as ever, said to be a decade off.

Such predictions are so routinely dead wrong because most simply extrapolate current trends. The reasoning seems to be that, because an idea is becoming technologically feasible and engineers personally would find it "cool," ipso facto it will exist!

This reasoning ignores three important innovation phenomena:

People focus on their own activities, not on technologies. The Apple Newton was the first personal digital assistant, and it had enormous processing power. But Apple expected the world to discover the useful applications. By contrast, Jeff Hawkins, the developer of the Palm organizer, focused every bit of its processing power on doing practical, real-world things such as managing schedules, contacts, and to-do lists. He even carried a block of wood around in his pocket for a year to simulate carrying a Palm. By imagining in every situation what the device would actually do, Hawkins ensured that when the product was launched it was truly relevant to users.

Unintended and "discovered" uses often are more valuable than the original intent. 3M’s Post-it Notes are just pieces of paper with "bad" glue on them. Yet people have found remarkable and surprising ways to adapt this simple technology to countless uses. In so doing, they have woven the technology into the fabric of their lives.

Most technologies are obvious and unexceptional by the time they launch. Developers of very advanced ideas routinely assume they will change the world. In fact, good ideas tend to be discovered simultaneously by numerous people because each advance in science and technology builds on what has come before.

In other words, real life gets in the way of engineers’ rational sense of progress. They may want to develop breakthrough ideas and design in a clear set of functions based on their, not their customers’, sense of what would be great to have. But customers aren’t buying it.

What matters for real people are the quotidian details. How will we get the kids ready for school? What are we going to make for dinner? How will I handle that party coming up? How to help the kids with their homework? Oh, it’s time to mow the lawn, pay the bills, or put out the garbage.

So, the locus of innovation needs to change. Instead of developing gizmos, companies need to design products that fit into consumers’ activities and solve the problems that get in our way, irritate us, or waste our time.

Based on extensive research by anthropologists watching how people live (not just talking to them about how they say they live), Doblin Group predicts that key areas for innovation will relate to six activities: child care, cooking, group entertaining, family coordination, learning, and home management. This is where the action is for future products and services.

A blind enthusiasm for technological advances is a very costly habit to indulge. It ignores the real nature of peoples’ busy lives, the scarcity of their attention, and the rising irritation we all have with devices that clutter our homes and confuse us. Yet, periodically, companies manage to convince one another that some big new trend is simply unstoppable. The last time this happened was in the postwar period when the hot theme was convenience. So, firms rushed to sell us electric knives and can openers, mixers, ice cream makers, electric knife sharpeners, and popcorn poppers. Did this deliver on the promise of convenience? No way.

"Smart homes" aren’t inevitable. Homes will continue to get smarter, of course. But they will do so by being more responsive to our activities—directly, respectfully, gently, in ways that amuse and beguile. Above all else, in ways that are gracefully accommodating. If you want to build a really hot product, start there.

Keeley is president of Doblin Group, a Chicago-based innovation strategy firm, and an adjunct professor of design strategy at the Illinois Institute of Technology. He can be reached through www.doblin.com.