The recent iPhone 5S ads on YouTube show what Apple is thinking about and how it wants to use the iPhone in the Internet of Things (IoT) world. They will be a player but not how people think. Watch the adds and it will lead you (so I think) to what they will do:
Apple iPhone 5S ad: Parenthood
Apple iPhone 5S ad: Strength
As you can see the iPhone in the Apple world will make the data of sensors in objects and wearables visible and usable. That is quite different from what we have seen from Google and Samsung.
It will be an interesting battle.