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The tech industry is in constant flux, with some innovations skyrocketing in adoption while others struggle to maintain relevance. ABI Research has released its latest five-year forecast, offering insight into which technologies will dominate the market and which may face decline by 2029. Their study examined 66 essential tech market shifts, with 33 areas expected to grow and 33 set to decline.
Some trends align with expectations, such as the rise of AI-powered tools, while others are more surprising, including the projected struggles of certain longstanding tech staples like tablets and datacenter chipsets. Below is a breakdown of the winners and losers in the tech space over the next half-decade.
Tech Trends Set to Boom
1. Large Language Models (LLMs)
LLMs are on track for explosive growth, with a projected 35% annual increase over the next five years. As businesses move from pilot projects to full-scale integration, AI-powered tools will become deeply embedded in enterprise software solutions.
2. Data Management Tools
The rise of sovereign clouds and AI-driven data utilization will push the data management market past $200 billion by 2029. The need for secure, scalable storage and processing solutions will drive investment in this area.
3. Smart Home Devices
Security, automation, and convenience will continue to fuel 14% CAGR growth, with total shipments reaching 500 million units by 2029.
4. Smart Glasses
Enterprise adoption of AI-powered smart glasses and extended reality (XR) technologies will surge, with shipments reaching 20.23 million by 2029.
5. Humanoid Robots
Despite questions about their maturity and practicality, shipments of humanoid robots will exceed 180,000 per year by 2030. Lower costs and novelty will drive adoption, particularly in hospitality, entertainment, and service industries.
6. Security Software & Services
With a 30% CAGR for security software and 35% for services, the demand for 5G-based network security is soaring. The shortage of cybersecurity professionals is pushing businesses to adopt managed security solutions.
7. Warehouse Management Systems
Advanced analytics and automation in logistics and supply chain management will drive the market to $8.6 billion.
8. Data Analytics for Equipment Effectiveness (OEE)
The push for factory-floor transparency and better data-driven decisions will support 13% CAGR growth in OEE solutions.
Tech Trends Facing Decline
1. Tablets
Despite a 7% rise in 2024, tablet shipments will decline through 2029. However, innovations like AI features and foldable displays could revive demand.
2. Smartphones
The market will see 1.39 billion shipments in five years, but longer replacement cycles and a lack of groundbreaking upgrades will slow growth. Gen AI integration may offer a much-needed boost.
3. Datacenter CPU Chipsets
Market share is expected to drop from 26% to 18%, as alternative computing solutions gain traction.
4. Industrial Blockchain
Revenue will decline by 2% annually, as many blockchain applications fail to transition from pilots to practical solutions. Private networks and sovereign clouds offer compelling alternatives.
5. Cloud Hyperscalers
The dominance of cloud giants will be challenged by localized colocation data centers, which offer better regulatory compliance and more control over enterprise infrastructure.
6. Security Hardware
While software-based alternatives such as firewall replacements gain popularity, security hardware will see only modest 7% CAGR growth.
7. Robotics Offline Programming Software
Growth will be limited to 8.5% annually, as robotics vendors struggle to justify high software costs.
8. VR Devices (Tethered & Mobile-Based)
Shipments will plateau, with only 34% of all VR shipments coming from tethered and mobile-based solutions by 2029. Standalone VR will continue to grow but at a slower pace than initially predicted.
What Undercode Says:
ABI Research’s forecast paints a clear picture of an industry leaning toward AI integration, automation, and smarter infrastructure while shifting away from hardware-based solutions and legacy technologies. Let’s break down why these trends make sense and what it means for businesses and consumers.
AI-Driven Innovation is Unstoppable
The biggest takeaway is the dominance of AI-powered technologies. LLMs, data analytics, and AI-enabled hardware like smart glasses and humanoid robots are all projected for strong growth. This isn’t just hype—AI is becoming a foundational layer across industries, optimizing operations and improving user experiences.
The Struggles of Legacy Tech
Tablets, security hardware, and datacenter CPUs face headwinds as their use cases decline. Cloud computing, edge processing, and AI-powered software solutions are proving to be more efficient than traditional hardware-based approaches.
Data is the New Gold
Data-driven solutions are at the core of almost every growth industry in this forecast. Whether it’s warehouse management, security, or smart homes, the ability to process and leverage data effectively is a competitive advantage. The rise of sovereign clouds highlights a growing emphasis on data privacy and compliance.
Why Some Innovations Are Slowing
Despite massive investments, industrial blockchain and VR solutions are struggling to find mainstream adoption. Blockchain’s failure to move beyond pilot projects suggests many applications lack a compelling business case. VR, meanwhile, remains niche, with gaming and entertainment driving demand more than enterprise use cases.
Is AI in Smartphones a Game Changer?
The smartphone industry has plateaued due to longer replacement cycles and diminishing innovation. However, the of Gen AI-powered features could reinvigorate consumer interest. This will depend on whether AI capabilities meaningfully enhance everyday use or simply become another marketing buzzword.
Robotics: The Hype vs. Reality
Humanoid robots sound futuristic, but practical applications remain limited. While novelty and cost reductions will drive early adoption, their long-term success depends on proving real-world value beyond entertainment and hospitality.
Security: Shifting from Hardware to Software
Cybersecurity is becoming more cloud-based and service-driven. With businesses struggling to maintain in-house security teams, managed security solutions are seeing a significant growth spurt. Traditional security hardware, on the other hand, is losing ground.
Final Thoughts
The future of tech is being shaped by AI, automation, and smarter data management. While certain technologies, like tablets and security hardware, face slowdowns, the demand for intelligence-driven solutions is only accelerating. Companies looking to stay ahead must prioritize AI integration, data security, and cloud-based innovations over legacy systems.
Fact Checker Results
- LLM growth aligns with broader AI industry trends, as businesses seek scalable AI solutions.
- Blockchain struggles mirror industry skepticism, with many applications failing to deliver unique value.
- Smartphone stagnation is consistent with market data, as consumers hold onto devices longer, waiting for meaningful upgrades.
References:
Reported By: https://www.zdnet.com/article/this-5-year-tech-industry-forecast-predicts-some-surprising-winners-and-losers/
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