This 5-year tech industry forecast predicts some surprising winners – and losers

Smartphone sales will grow in fits and starts, while tablet demand will wane. Large language models (LLMs) will boom, and demand for data management solutions will soar.

Also: Crawl, then walk, before you run with AI agents, experts recommend

These technologies will be “hot” — or “not” — over the coming five years, as projected by ABI Research in its latest update on technology markets through 2029. Some surprises emerged. The consultancy examined 66 essential tech market shifts, with 33 poised for growth and 33 facing contraction. Below are eight leaders and eight laggards.

Fast-growing technologies

Large language models: LLMs will see 35% compounded annual growth over the next five years, ABI predicted: “Enterprise software spending on LLMs continues to grow rapidly as proofs of concept mature into scaled deployments embedded across entire companies.”

Data management tools. The exponential growth of cutting-edge technologies such as machine learning and generative artificial intelligence (Gen AI) will generate more than $200bn worth of data management opportunities worldwide by 2029: “The emergence of sovereign clouds underscores the need for better protection of personal and sensitive data.”  

Also: Enterprises are hitting a ‘speed limit’ in deploying Gen AI – here’s why

Smart home devices: ABI predicted technology offerings for home safety, security, and convenience will see a compound annual growth rate (CAGR) of 14% through 2029, reaching total shipments of 500 million.

Smart glasses: “High-value extended reality use cases and novel devices like AI-enabled smart glasses will propel enterprise XR adoption, which will reach 20.23 million shipments by 2029,” ABI said.

Humanoid robots. Shipments of life-like robots “will pick up pace in 2025, reaching over 180,000 per year by 2030 — regardless of technological maturity and practical value,” forecasted ABI. “Driven by lowering costs and novelty, humanoid robots for service, hospitality, and entertainment will buoy demand in the near term.”

Security software and services: High demand for 5G-based network security software and services will drive a CAGR of 30% for software and 35% for services. “A dearth of available experts,” noted ABI, “prevents the growth of in-house security teams and drives the need for managed solutions.”

Also: I was an AI skeptic until these 5 tools changed my mind

Warehouse management systems: Investment will reach $8.6 billion, “driven by the introduction of advanced planning and analysis capabilities, as well as the increasing numbers of connected devices and automated material handling solutions requiring orchestration.”

Data analytics for overall equipment effectiveness (OEE): ABI said these solutions will grow at a CAGR of 13%: “With the increasing importance of data utilization, along with the never-ending goal for complete transparency into factory-floor operations, OEE is making a resurgence as a key stepping stone to effectively tackle these issues.”

Slow- or no-growth areas

Tablet computers: Despite a 7% increase in 2024, tablet shipments will decline slowly through 2029, ABI predicted: “However, future demand may be driven by improved cellular attach rates with more aggressive pricing, new form factors — foldable/flexible displays — and adoption of AI features.”

Smartphones: Though ABI projected 1.39 billion smartphone shipments over the next five years, the market “has been maturing with demand being hampered not only by economic headwinds in recent years but also by a lack of compelling upgrades and lengthening replacement cycles.” However, adding Gen AI to smartphones could provide a boost.   

Also: Intel touts new Xeon chip’s AI power in bid to fend off AMD, ARM advances

Datacenter CPU chipsets: Declining from a 26% market share to 18% within the next five years. 

Industrial blockchain: Revenue will fall almost 2% annually: “Most applications for industrial blockchain have failed to move past the pilot stages into successful commercial offerings,” said ABI. “Many of these do not provide a compelling enough use case that cannot be fulfilled by other technologies — private networks, sovereign clouds, and emergent confidential computing technologies.”

Cloud hyperscalers: “By 2029, with 7,800+ data centers globally, cloud hyperscalers face intense competition from colocation data centers as enterprises turn to localized entities,” ABI stated. “Colocation facilities allow enterprises to partner with local providers that understand the local regulatory landscape, allowing greater control over their data and infrastructure.” 

Also: Most US workers don’t use AI at work yet. This study suggests a reason why

Security hardware: The CAGR for the next five years will remain modest at 7%, ABI predicted, buffeted by “the growing prevalence of software-based alternatives to traditional hardware security tools such as firewalls.” 

Robotics offline programming software: “Revenue will grow at a modest 8.5% annual rate, resulting in turbulent years for smaller software vendors. For robotics automation, service providers and original equipment manufacturers must provide programming software at a minimal cost to demonstrate the working viability of their products,” according to ABI.

Tethered and mobile-based VR devices:  Shipments of these devices will plateau, said ABI, “accounting for only 34% of all shipments by 2029. While standalone VR devices are expected to continue to see shipment growth over the next five years, the rate of growth is slower than previously expected.”

Also: OpenAI’s Deep Research can save you hours of work – and now it’s a lot cheaper to access

Even one year out, the future is difficult to predict in the fast-changing technology industry. However, ABI research shows the market favors more intelligent, cost-effective solutions. The researcher’s projections are a guide to where the market will shift.