Tech Industry Forecast 2025-2029: Key Winners and Losers

The technology sector is rapidly evolving, with a mix of innovations and market shifts expected to shape the next five years. ABI Research’s forecast offers an insightful look into which technologies will rise and which will decline, providing a roadmap for industry players. With predictions about smartphone sales, large language models (LLMs), data management, and more, the tech landscape is set for some surprising turns. This article explores the fastest-growing technologies and those on the decline, revealing a dynamic market where growth and contraction coexist.

Tech Forecast: Surprising Trends and Projections

ABI Research’s analysis reveals that the next five years will be pivotal for many tech sectors. The consultancy examined 66 significant market shifts, with half showing growth and the other half seeing contraction. Among the key trends, large language models (LLMs) and data management solutions are poised for massive growth, while certain segments, like tablets and smartphones, are expected to face stagnation.

1. Fast-Growing Technologies

Large Language Models (LLMs): These models are set to experience a 35% compounded annual growth (CAGR) over the next five years. LLMs are being increasingly integrated into enterprise software, transitioning from proofs of concept to full-scale deployments across various industries. The push toward generative AI will drive much of this growth.
Data Management Tools: As AI technologies like machine learning and generative AI expand, the demand for advanced data management tools will surge. By 2029, the global market for data management solutions is projected to exceed $200 billion, with sovereign clouds and stricter data protection laws contributing to this growth.
Smart Home Devices: With a CAGR of 14%, smart home technology will continue its upward trajectory. The demand for devices focused on home safety, security, and convenience is expected to grow, pushing the market to over 500 million units by 2029.
Smart Glasses: Extended reality (XR) devices, especially AI-powered smart glasses, will see increased enterprise adoption. ABI estimates that shipments of enterprise XR devices will reach 20.23 million by 2029, fueled by high-value applications in various industries.
Humanoid Robots: Life-like robots designed for service, hospitality, and entertainment will see a surge in demand. Although these robots may not be technologically mature, their novelty and decreasing costs will boost shipments, potentially reaching 180,000 units per year by 2030.
Security Software and Services: The need for advanced network security, driven by the widespread adoption of 5G, will push the growth of security software and services. A lack of skilled professionals in-house will lead enterprises to rely on managed security solutions, driving a CAGR of 30% for software and 35% for services.
Warehouse Management Systems: Investment in advanced systems for managing warehouses and automated material handling will climb to $8.6 billion. The of better planning tools and an increasing number of connected devices will fuel this growth.
Data Analytics for Equipment Effectiveness (OEE): As manufacturing continues to evolve, data analytics for optimizing equipment effectiveness will grow at a 13% CAGR, becoming a crucial tool for increasing transparency and efficiency in factory operations.

2. Slow or No-Growth Areas

Tablets: While tablet shipments are expected to rise by 7% in 2024, the market will slowly decline through 2029. However, new features like foldable displays and AI integration may spark future demand.
Smartphones: Although smartphone shipments will total 1.39 billion units over the next five years, the market will face stagnation. Economic factors and longer replacement cycles have limited demand, though integrating generative AI into smartphones may provide a temporary boost.
Datacenter CPU Chipsets: The market share for datacenter CPU chipsets is expected to drop from 26% to 18% over the next five years, reflecting a shift in technology preferences.
Industrial Blockchain: Industrial blockchain applications have largely failed to progress past the pilot stage, leading to a predicted annual revenue decline of nearly 2%. Emerging technologies like private networks and confidential computing are providing more compelling alternatives.
Cloud Hyperscalers: Competition for cloud services will intensify as enterprises shift toward localized colocation data centers, offering greater control and regulatory compliance. This trend will challenge the dominance of cloud hyperscalers.
Security Hardware: Despite the rise of software-based security solutions, hardware-based security tools like firewalls will see modest growth, with a 7% CAGR predicted over the next five years.
Robotics Offline Programming Software: Although there will be some growth in robotics programming software, it will remain modest at 8.5% annually, causing challenges for smaller software vendors.
Tethered and Mobile-Based VR Devices: Virtual reality devices that rely on being tethered or mobile will experience a decline, with shipments expected to plateau at just 34% of total VR shipments by 2029.

Conclusion

The fast-paced world of technology is constantly evolving, and ABI’s forecast helps to illuminate where the industry is heading. While certain sectors like LLMs and data management tools will soar, others like tablets and smartphones are entering a phase of stagnation. As enterprises continue to adapt to new technologies, understanding these trends will be essential for positioning products and services for future success.

What Undercode Says:

As a growing force in the tech industry, our analysis shows that we’re at a pivotal moment for several technologies. Large language models (LLMs) represent one of the most exciting growth areas in the next five years. The enterprise-wide deployment of AI technologies is no longer just a theoretical prospect but an operational reality that will reshape industries. LLMs, such as GPT-based models, are already streamlining customer service, data analytics, and even creative processes. The compound annual growth rate (CAGR) of 35% projected for these models reflects the increasing reliance of businesses on artificial intelligence to enhance their operations.

Additionally, the massive shift towards smarter data management solutions signals that enterprises are prioritizing data security and organization more than ever. With the emergence of sovereign clouds and the tightening of data privacy regulations, the need for robust data management tools is growing, ensuring that sensitive information is handled with care.

On the flip side, while the smartphone market is mature and will face a slow growth trajectory, the integration of Gen AI into smartphones could extend their life cycle and offer a boost to manufacturers. However, the continued reliance on incremental hardware improvements rather than groundbreaking innovation could hamper more significant advances in mobile tech.

Moreover, technologies like smart glasses and humanoid robots are gaining traction in the enterprise sector. Though these markets are still niche, their expansion is forecasted to rise steadily as businesses experiment with new ways to use augmented reality (AR) and robotics in their day-to-day operations. In particular, AI-powered smart glasses could revolutionize industries such as logistics, healthcare, and customer service.

However, some technologies face significant challenges. The slow decline of tablets and the stagnation of VR hardware are signs that these markets might have reached their peak, with no major innovation expected in the immediate future. These slow-growth areas reflect the broader trend of technology maturation, where incremental changes are insufficient to spur major shifts in demand.

Fact Checker Results

The forecast provided by ABI Research is based on thorough industry analysis and provides a balanced view of future trends.
The claim of a 35% CAGR for LLMs is in line with recent technological advancements and the growing demand for generative AI tools across industries.
Predictions on the decline of tablets and smartphones reflect current consumer behavior patterns, as tech adoption cycles continue to lengthen.

References:

Reported By: https://www.zdnet.com/article/this-5-year-tech-industry-forecast-predicts-some-surprising-winners-and-losers/
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