From Optimism to Caution: The Changing Mood of Tech Markets

The latest results from our Q2 Market Confidence Survey reveal a cooling of sentiment across global device markets. Compared to the optimism seen earlier in the year, confidence in short-term market growth has declined, even as long-term fundamentals remain relatively stable. While industry forecasts still point to steady device shipment growth over the next five years, respondents are increasingly wary of short-term risks, including geopolitical tensions, economic uncertainty, and shifting supply dynamics.

The automotive sector has returned to pre-pandemic levels, with shipments across vehicles continuing to rise. Electrification remains a key trend, extending across passenger cars, commercial vehicles, and two-wheelers. However, market volatility is evident, particularly in response to expected trade tariffs and broader economic pressures. While some firms report front-loaded demand earlier in the year, many anticipate a potential slowdown in the second half. Long-term trends remain supportive, with more semiconductor content per vehicle and maturing EV infrastructure.

Across home-related technologies, sentiment is mixed. Home appliances are stabilizing, with smart features becoming more common, though the outlook is largely flat or modestly positive. The smart home category continues to face hurdles due to fragmented standards and limited product innovation. Home audio and video markets remain mature, with little change expected. One notable exception is consumer robotics, which stands out as a growth area, driven by increasing interest in automation and AI-powered functionality.

Wearables continue to perform well overall, though enthusiasm has eased slightly since the previous quarter. True wireless earbuds remain a stable sub-category, while traditional headphones face more negative sentiment. Emerging products, such as smart rings and AI-enabled wearables, offer new growth opportunities, helping to balance maturity in more established segments.

The gaming sector has seen one of the most notable drops in short-term confidence. Respondents cite weakening consumer demand and rising economic constraints as key concerns. In the computing sector, sentiment has also dipped slightly, with slower refresh cycles and market maturity influencing outlooks. While both segments remain important, the tone has become more cautious.

Regional sentiment varies significantly. Respondents express concern about the United States and Europe, pointing to rising costs, political uncertainty, and tariff impacts. China presents a mixed picture, with demand appearing inconsistent and policy-driven risks influencing decision-making. In contrast, India and Southeast Asia continue to show strong momentum, supported by growing industrial activity and supply chain diversification. Africa was also mentioned for its long-term potential, though development is still at an early stage.

This quarter’s survey reveals a clear moderation in short-term confidence across global device markets, despite continued belief in the strength of long-term growth fundamentals. Geopolitical tension, economic uncertainty, and evolving trade policies are reshaping forecasts and investment strategies. Segments like automotive and wearables remain relatively resilient, while consumer-focused categories such as gaming, computing, and smart home show greater caution. The standout opportunity lies in robotics and emerging AI-enabled devices, which continue to capture attention despite broader volatility. Regional dynamics are shifting too, with optimism concentrated in India and Southeast Asia, while the US, Europe, and parts of China face growing headwinds. For businesses, this means staying agile, reassessing regional priorities, and focusing on innovation-driven growth areas.