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2025-03-01
The technology landscape is evolving rapidly, and industry experts are predicting shifts that could drastically reshape markets over the next five years. ABI Research has provided an insightful forecast of what technologies will thrive and which ones might struggle. Their predictions examine 66 key tech market shifts, with 33 expected to grow and 33 forecasted to decline. In this article, we will explore the technologies poised for growth and those facing stagnation, along with an in-depth analysis of why these changes are happening.
Tech Industry Forecast: What’s on the Rise?
ABI
1. Large Language Models (LLMs)
LLMs are expected to grow rapidly with a 35% compounded annual growth rate (CAGR) over the next five years. As enterprise software adoption of these models accelerates, LLMs will become a core part of business operations, from customer support to data analysis.
2. Data Management Tools
With the surge in machine learning and generative AI, demand for data management solutions is expected to exceed $200 billion by 2029. As technologies like sovereign clouds emerge, protecting personal and sensitive data will be a major focus.
3. Smart Home Devices
Offering enhanced safety, security, and convenience, the smart home market will grow at a CAGR of 14%, reaching 500 million shipments by 2029.
4. Smart Glasses and Extended Reality
The demand for AI-enabled smart glasses and extended reality (XR) technology is expected to drive enterprise adoption, with shipments projected to reach 20.23 million by 2029.
5. Humanoid Robots
Humanoid robots are forecasted to experience significant growth, with shipments expected to surpass 180,000 annually by 2030. Driven by novelty and falling production costs, robots for service, hospitality, and entertainment will see increasing demand.
6. Security Software and Services
The ongoing expansion of 5G networks will fuel a 30% CAGR in security software and a 35% increase in security services, with managed solutions becoming critical due to a shortage of security experts.
7. Warehouse Management Systems
Investment in warehouse management systems will skyrocket, with a focus on automation and connected devices, reaching $8.6 billion by 2029.
8. Data Analytics for Equipment Effectiveness
As manufacturing seeks greater transparency and efficiency, data analytics for overall equipment effectiveness (OEE) will experience a 13% CAGR.
Slow-Growth or Declining Areas
While some sectors are poised for explosive growth, others are forecasted to face stagnation or decline:
1. Tablet Computers
Tablet shipments will see a slight increase in 2024, but the market will slowly contract through 2029. New form factors like foldable displays may drive future demand.
2. Smartphones
Smartphones face a maturing market, with long replacement cycles and fewer compelling upgrades. The addition of generative AI could provide a boost to the market, but growth is expected to remain slow.
3. Datacenter CPU Chipsets
The share of datacenter CPU chipsets will decline from 26% to 18% over the next five years.
4. Industrial Blockchain
Despite hype, most industrial blockchain applications have struggled to move past the pilot phase, leading to a nearly 2% annual revenue decline.
5. Cloud Hyperscalers
The rise of localized colocation data centers is expected to increase competition, making it difficult for cloud hyperscalers to maintain their dominance by 2029.
6. Security Hardware
The security hardware market will see modest growth at just 7% CAGR, as software-based security solutions become more prevalent.
7. Robotics Offline Programming Software
Robotics offline programming software will grow at a modest 8.5% annual rate, leaving smaller vendors vulnerable to market fluctuations.
8. Tethered and Mobile-Based VR Devices
Virtual reality devices, particularly tethered and mobile-based, are expected to plateau, with only 34% of all VR device shipments falling into this category by 2029.
What Undercode Says:
The rapid growth of technologies such as large language models, data management solutions, and smart home devices is reshaping the future of the tech industry. Businesses are investing heavily in tools that promise automation, better data governance, and enhanced customer experiences. This shift is no surprise as companies are increasingly prioritizing solutions that offer scalability, cost-effectiveness, and high return on investment.
One notable area of growth is in LLMs. As the enterprise adoption of LLMs accelerates, businesses will increasingly rely on these models for everything from enhancing customer support to automating internal workflows. The move from proof-of-concept to large-scale implementation will drive an explosion of growth, which ABI projects will be sustained through 2029. This will likely give rise to new use cases, such as AI-driven chatbots, advanced data analytics, and improved decision-making processes.
Furthermore, the data management sector is thriving due to the influx of machine learning and generative AI. The demand for managing vast amounts of data securely will become more pronounced, with sovereign clouds playing a pivotal role in safeguarding privacy. Data security and management tools will become more advanced, fostering deeper trust in digital infrastructures.
On the other hand, certain sectors face stagnation due to maturing technology and oversaturated markets. Smartphones, once the driving force of innovation, are expected to experience slower growth, primarily due to the lengthening replacement cycles and the absence of significant technological breakthroughs. While AI integration might offer a glimmer of hope, it’s unlikely to drive the same explosive growth seen in previous years. Similarly, tablet computers are facing decline, with their once-dominant role being overshadowed by smartphones and other devices offering better functionality.
Moreover, industrial blockchain is one of the most surprising slowdowns. Despite the initial excitement around blockchain technology, its industrial applications have yet to mature. Many solutions are being outpaced by more effective alternatives such as sovereign clouds and confidential computing, which don’t suffer from blockchain’s inherent scalability and security issues.
The trend towards cloud hyperscalers also faces a shift. The growing popularity of localized, colocation data centers, which offer more control and compliance with regional regulations, signals a move away from centralized cloud services. This could significantly affect the strategies of major hyperscalers like AWS and Google Cloud.
Overall, the technology market is moving towards more intelligent, cost-effective, and secure solutions. Companies that can adapt to these evolving demands by embracing automation, AI, and data-centric strategies will likely thrive. Meanwhile, those relying on legacy systems or struggling to deliver tangible improvements to customers may find themselves in decline.
Fact Checker Results:
- ABI’s projections align with current market trends, with data management and AI tools gaining significant traction across industries.
- The slow decline in tablets and smartphones reflects mature markets with limited innovation in recent years.
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References:
Reported By: https://www.zdnet.com/article/this-5-year-tech-industry-forecast-predicts-some-surprising-winners-and-losers/
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