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The tech industry is evolving rapidly, with some innovations poised for massive growth while others face stagnation or decline. ABI Research has released a five-year forecast highlighting key trends, predicting which technologies will thrive and which may falter by 2029. Their analysis covers 66 market segments, with 33 showing strong growth potential and 33 likely to decline.
The findings are surprising: while large language models (LLMs) and data management tools are set to boom, traditional consumer electronics like tablets and datacenter CPU chipsets face challenges. The report underscores the shifting priorities in tech, emphasizing security, AI-driven solutions, and automation as key areas of investment.
Let’s break down the projected winners and losers of the next five years in the tech industry.
Fast-Growing Technologies
1. Large Language Models (LLMs)
LLMs are expected to grow at an annual rate of 35%, as enterprises increasingly integrate them into operations. As AI becomes more capable, companies will embed LLMs into customer service, automation, and business intelligence.
2. Data Management Tools
By 2029, data management solutions will create a $200 billion market, fueled by the expansion of AI and machine learning. Sovereign clouds and enhanced security measures will drive demand for better data governance.
3. Smart Home Devices
Home automation technology, including safety and security solutions, will see a 14% compound annual growth rate (CAGR), with total shipments expected to hit 500 million units.
4. Smart Glasses
AI-powered smart glasses and extended reality (XR) solutions will gain traction in enterprise environments, with shipments projected to reach 20.23 million by 2029.
5. Humanoid Robots
By 2030, annual shipments of humanoid robots will surpass 180,000 units. The declining cost of robotics, combined with their appeal in service and entertainment sectors, will drive adoption.
6. Security Software and Services
The need for 5G security solutions will lead to a 30% CAGR for security software and a 35% CAGR for managed security services, as companies struggle to find in-house cybersecurity expertise.
7. Warehouse Management Systems
Automation in logistics will push investment in warehouse management systems to $8.6 billion, supporting connected devices and AI-powered inventory solutions.
8. Data Analytics for Equipment Effectiveness (OEE)
With transparency and efficiency becoming priorities, OEE analytics will grow at 13% annually, helping manufacturers optimize production processes.
Technologies Facing Decline or Slow Growth
1. Tablet Computers
Tablet shipments will see a slight uptick in 2024 but will decline through 2029. However, flexible displays and AI integration could drive renewed interest.
2. Smartphones
While 1.39 billion smartphones will ship over the next five years, the market is slowing due to longer replacement cycles and fewer must-have upgrades. AI-powered smartphones may provide a sales boost.
3. Datacenter CPU Chipsets
Market share for datacenter chipsets is expected to fall from 26% to 18%, as enterprises explore alternative computing architectures.
4. Industrial Blockchain
The industrial blockchain market will shrink by nearly 2% annually, as many pilot projects fail to deliver compelling use cases beyond what existing technologies offer.
5. Cloud Hyperscalers
With over 7,800 data centers expected by 2029, cloud hyperscalers face stiff competition from local colocation providers offering better regulatory compliance.
6. Security Hardware
Physical security hardware will grow at a modest 7% CAGR, with software-based security solutions increasingly replacing traditional hardware like firewalls.
7. Robotics Offline Programming Software
Revenues will rise at 8.5% annually, but smaller software vendors may struggle as robotics manufacturers prioritize cost-effective programming solutions.
8. Tethered and Mobile-Based VR Devices
While standalone VR headsets will continue to grow, shipments of tethered and mobile-based VR devices will plateau, capturing only 34% of total market share by 2029.
What Undercode Say:
This forecast from ABI Research highlights a fundamental shift in the tech industry, where intelligence, automation, and security take center stage, while traditional consumer electronics struggle. Let’s analyze the implications:
1. The Rise of AI-Driven Enterprise Solutions
LLMs and data management tools are driving enterprise adoption. This shift signals that companies are increasingly prioritizing AI-powered insights to improve efficiency and decision-making. The projected $200 billion market for data management indicates that handling and protecting vast amounts of information is becoming a core business need.
2. The Automation Boom
Warehouse management systems, security software, and humanoid robots all point to a growing reliance on automation. The future of logistics and security lies in AI-powered, connected solutions that streamline operations and reduce human intervention.
3. Decline of Traditional Consumer Tech
Tablets, smartphones, and VR devices are stagnating due to market saturation. The lack of groundbreaking innovation and increasing replacement cycles mean these devices no longer generate the excitement they once did. However, AI-powered smartphones could reinvigorate the sector.
4. The Cloud Computing Shakeup
The dominance of cloud hyperscalers is being challenged by colocation providers. As businesses seek better control over their data while complying with local regulations, smaller cloud providers may gain market share at the expense of global giants.
5. Security: A Key Investment
Cybersecurity continues to be a critical issue, but companies are shifting from hardware-based solutions to software-driven, AI-powered security services. The demand for managed security services reflects a shortage of skilled cybersecurity professionals.
6. Industrial Blockchain’s Struggles
Blockchain was once hailed as a revolutionary technology for industries, but its failure to move beyond pilot projects suggests that more practical alternatives—like sovereign clouds and private networks—are proving more effective.
7. The Future of Robotics
Humanoid robots are on the rise, but their adoption will depend on proving real-world value beyond novelty. The robotics industry must balance affordability and functionality to drive widespread adoption in sectors like hospitality and manufacturing.
8. The Evolution of Smart Devices
Smart home technology is thriving, while smart glasses are poised for significant adoption in enterprise settings. The challenge for these technologies is ensuring they provide meaningful, everyday utility rather than being niche products.
Fact Checker Results
- ABI Research’s Predictions Align with Market Trends: The forecast is consistent with the growing dominance of AI, automation, and security concerns in the tech sector.
- Consumer Electronics Faces Market Saturation: The slowing demand for tablets, smartphones, and VR aligns with historical patterns of tech product cycles.
- Data Management’s Growth is a Key Industry Trend: The emphasis on sovereign clouds and AI-driven data security solutions is in line with current enterprise priorities.
This analysis provides a roadmap for businesses and investors looking to navigate the evolving tech landscape, ensuring they focus on high-growth opportunities while avoiding declining markets.
References:
Reported By: https://www.zdnet.com/article/this-5-year-tech-industry-forecast-predicts-some-surprising-winners-and-losers/
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