The idea of using existing electronics in smart home appliances and connecting them to the Internet is a new dimension along which technologies continue to grow. In Japan, electronics giants are selling various kinds of smart home appliances and have also joined hands to create standards for linking networked home appliances. While there is a huge potential market for such appliances, both in Japan and around the world, there are serious security challenges that have to be addressed in order to realize their true benefits. In this paper we examine a number of related security incidents that have occurred in Japan and identify existing challenges from technical, social, and practical aspects. We also discuss some countermeasures that can be used to prevent existing and projected security breaches.