Since 2021, we’ve made many predictions and thoughts about ecommerce and the market as a whole – some were more accurate, others less so. What characterized them? Which of them are coming true? ARK tells us more about it.
To identify large-scale investment opportunities, ARK focuses on transformative technology’s leaders and beneficiaries. That’s why since 2017, they have provided us with annual research reports that offer some findings and conclusions for the year.
Let’s find out the Big Ideas 2021.
#1 Deep Learning
Deep learning is a form of artificial intelligence (AI) that uses data to write software. By accelerating the creation of software, it could turbocharge every industry.
ARK’s research shows that deep learning will add $30 trillion to the global equity market capitalization in the next 15-20 years.
Source: Big Ideas 2021, ARK Report
Deep learning also creates the next generation of computing platforms, including:
- conversational computers,
- self-driving cars,
- consumer apps.
Furthermore, deep learning could create more economic value than the internet – it increased equity market capitalization by $13 trillion over two decades. On the other hand, deep understanding has made $2 trillion in market capitalization as of 2020.
#2 Data Centers
The data center industry is undergoing a revolution. As a result of the scale of the mobile ecosystem, ARM processors are poised to disrupt Intel soon. In addition to applying open-source principles to hardware, RISC-V is also becoming a standard in low-cost computing.
By 2030, it is expected that ARM and RISC-V will have a combined market share of 71%.
Source: Big Ideas 2021, ARK Report
Also, ARM could power the majority of developer PCs by 2030.
In 2030, most developer PCs might be powered by ARM CPUs, marking the end of Intel’s x86 era.
#3 Virtual Worlds
Virtual worlds consist of:
- video games,
- augmented reality,
- and virtual reality.
Currently, virtual worlds are independent, but they might become interoperable in the future. According to research, virtual world revenues are predicted to grow by 17% annually from $180 billion to $390 billion by 2025.
Both video games and their business models have evolved (see Steam keys, for example). Over the past 10 years, in-game purchases have increased from 20% to 75% of total gaming revenue. By 2025, they could reach 95%.
Source: Big Ideas 2021, ARK Report
Moreover, companies like Snapchat, Facebook, and Apple have invested heavily in augmented reality in recent years, encouraging mobile users to use AR tools. As a result, ARK forecasts that by 2030 the AR market could scale from under $1 billion to $130 billion.
Additionally, the AR & VR markets will grow at a 59% compound annual rate during the next five years, from $3 billion to $28 billion in 2025.
#4 Digital Wallets
In today’s financial services landscape, digital wallets are also permeating brokerage and lending. Beyond financial products, digital wallets could serve as lead generation platforms.
Digital wallets are valued between $250 and $1,900 per user today but could reach $20,000 per user by 2025, representing a $4.6 trillion opportunity.
Source: Big Ideas 2021, ARK Report
#5 Bitcoin
Since bitcoin’s price hit an all-time high, some companies started considering bitcoin as cash on their balance sheets.
Bitcoin offers one of the best risk-reward profiles among assets. Over the next five to ten years, its network capitalization could increase from $500 billion to $1-5 trillion.
Bitcoin’s price could be significantly affected by the institutional investment. According to ARK’s simulation, institutional allocations between 2.5% and 6.5% could impact bitcoin’s price by $200,000 to $500,000.
Source: Big Ideas 2021, ARK Report
#6 Electric Vehicles (EVs)
Electric vehicles are approaching sticker price parity with gas-powered cars. Comparatively, for an EV, the total cost of ownership fell below that of a Toyota Camry in 2019. Soon, sticker prices are likely to follow suit.
Source: Big Ideas 2021, ARK Report
Leaders in the EV market are developing innovative battery designs to enable longer-range vehicles at lower costs, and there also advancements in the CPO platform technology used to power charging points.
ARK forecasts that EV sales should increase roughly 20-fold from ~2.2 million in 2020 to 40 million units in 2025. ARK also expects the share of “neighborhood electric vehicles” to rise dramatically as a percentage of total EV sales.
#7 Automation
Automation can shift unpaid labor to a paid one. By automating food prep, cleanup, and grocery shopping, for instance, food services will become market activities.
In the next five years, ARK believes that the US economy will automate at a rate five times faster than manufacturing did 25 years ago.
Source: Big Ideas 2021, ARK Report
#8 Autonomous Ride-Hailing
Autonomous ride-hailing can reduce the cost of mobility to one-tenth the average cost of a taxi today, spurring widespread adoption. Based on ARK’s research, independent ride-hailing platforms will generate more than $1 trillion in profits annually by 2030. Moreover, automakers and fleet owners could profit by $250 billion and $70 billion.
Inflation-adjusted, the cost of owning and operating a personal car has not changed since the Model T. According to ARK, consumers will pay $0.25 per mile for autonomous taxis when they are widely available.
Source: Big Ideas 2021, ARK Report
#9 Delivery Drones
Drones are expected to reduce the cost of transporting goods and people significantly. They are also likely to transform shopping behavior, minimize travel time, and even save lives.
By 2025, ARK estimates that drone delivery platforms will generate $275 billion in delivery revenues, $50 billion in revenues, $14 billion in hardware sales, and $3 billion in mapping revenues.
Source: Big Ideas 2021, ARK Report
#10 Orbital Aerospace
As a result of advances in deep learning, mobile connectivity, sensors, 3D printing, and robotics, costs that have been ballooning for decades are beginning to decline. Therefore, satellite launches and rocket landings are increasing.
With satellite networks launching and leveraging data for terrestrial businesses, satellites could boost GDP growth.
Source: Big Ideas 2021, ARK Report
The market for connected planes, trains, and motor vehicles will reach $36 billion by 2025. As a result, space services are likely to be in high demand from governments around the world.
In total, satellite connectivity revenue could approach $100 billion by the middle of the decade.
#11 3D Printing
In contrast to subtractive manufacturing, which removes material from large blocks, 3D printing builds objects layer-by-layer, and it’s a promising solution for the future.
3D printing revenue declined in 2020, but new users utilized the technology during the pandemic. By 2025, ARK predicts that the global 3D printing market will grow at a compound annual rate of 60%, from $12 billion to roughly $120 billion.
Source: Big Ideas 2021, ARK Report
#12 Long Read Sequencing
NGS (next-generation DNA sequencing) is driving the genomic revolution. Though historically dominated by short-read sequencing, it’s possible that long-read sequencing will gain share at a rapid rate.
Many sequencing applications benefit from LRS analytics. For example, in some clinical settings, such as pediatric intensive care, rapid whole genome sequencing (WGS) has high reimbursement rates, allowing diagnostic providers to switch to LRS more easily.
Source: Big Ideas 2021, ARK Report
#13 Multi-Cancer Screening
Researchers at ARK estimate that the convergence of innovative technologies has reduced the cost of multi-cancer screening by 20 times, from $30,000 in 2015 to $1,500 today. It should fall another 80%+ to $250 by 2025.
Multi-cancer screening detects dozens of cancers at an early stage based on a single blood test.
Source: Big Ideas 2021, ARK Report
Thus, the US multi-cancer screening market is expected to reach $150 billion by 2020. Also, an MCS protocol could prevent 66,000 cancer deaths annually, saving 1.4 million human lives.
Source: Big Ideas 2021, ARK Report
#14 Cell and Gene Therapy
There should be a shift from the first generation of cell and gene therapies to the second generation, from:
- liquid to solid tumors,
- autologous to allogeneic cell therapy,
- ex vivo to in vivo gene editing.
As a result of cell and gene therapy innovations, the market addressable for oncology therapeutics could more than double.
Cellular immunotherapies, such as TILs, TCRs, and CAR T cells, could nearly triple the market addressable, adding $30 billion to the current $13 billion total addressable markets (TAM).
In addition, by combining cell therapy innovation and allogeneic cells, the TAM for oncology gene therapy could increase to more than $260 billion, roughly 20-fold.
Source: Big Ideas 2021, ARK Report
To sum up
These are the trend proposals for the coming years. We’ll see if they all come true because, looking at the recent and rather deep declines of Bitcoin, not everything may go as predicted. Either way, everything is ahead of us!
