You wouldn't have to be an expert on DNA to predict 10 years ago that gene sequencing was likely to increase in importance. That's exactly what happened, with Illumina (NASDAQ:ILMN) leading the way.

Illumina is the 800-pound gorilla in the global gene sequencing market. But will the company extend its dominance through the next 10 years or could something happen to derail Illumina along the way? Here are three much different scenarios for where Illumina might be in 10 years.

Image of a DNA double helix above an outstretched palm.

Image source: Getty Images.

Scenario No. 1: An even bigger juggernaut

Could Illumina be an even bigger juggernaut in the gene sequencing industry in the future than it is now? Absolutely.

For one thing, the market will almost certainly be much larger 10 years from now. As Illumina CEO Francis deSouza put it in his comments at the J.P. Morgan Healthcare Conference earlier this year, "The ubiquity and impact of genomics will dwarf everything we've seen to date."

That optimism seems to be warranted. Consumer genomics is likely to increase in popularity as more individuals seek to find out about their health-related genetic attributes. More countries will embark on major population genomics efforts. Precision medicine will become the standard of care in many diseases. Liquid biopsies that use gene sequencing to detect cancer at early stages will probably be a huge market.

Illumina is already pioneering in each of these areas. It's the undisputed leader in short-read gene sequencing, which is known for its high levels of accuracy and throughput. The pending acquisition of Pacific Biosciences of California (NASDAQ:PACB) could give Illumina an edge in extending its dominance to the long-read sequencing market.

Scenario No. 2: Moderately successful with rising competition

Another scenario for where Illumina will be in 2029 is for the company to be moderately successful but facing stiffer competition than it does now. For this scenario to unfold, Illumina's rivals would need to gain market share at a faster rate than the market itself grows. There are two things that could occur to make this scenario more likely.

First, accuracy levels of long-read gene sequencing would probably need to increase significantly but not by enough to totally displace short-read sequencing. Second, after a successful acquisition of PacBio by Illumina, competing approaches to long-read sequencing would need to outperform PacBio's single-molecule real-time (SMRT) long-read sequencing technology.

Probably the most likely competing approach that would make this a reality is nanopore sequencing. With nanopore sequencing, an ionic current passes through nanopores (nano-scale holes) to measure the changes in current as biological molecules either pass through the nanopore or close to it. This change in current can then be used to identify the molecule. Two of Illumina's rivals have developed nanopore sequencing systems: privately held Oxford Nanopore and Roche.

Scenario No. 3: A has-been on the decline

The last scenario is by far the worst for Illumina. It's possible that the company in 10 years could be a has-been on the decline. How? By having its technology totally disrupted by a better approach.

Again, the most likely candidate for this disruption is nanopore sequencing. Oxford Nanopore has made strides in improving its accuracy levels. The company could be on a path to matching and even exceeding the accuracy of Illumina's short-read sequencing systems.

Oxford Nanopore's systems also have the advantage of being small and portable. Its MinION system can be held in one hand. By comparison, Illumina's smallest system, iSeq, is roughly the size of a desktop printer.

If Illumina's acquisition of PacBio falls through, it could make this worst-case scenario more probable since the company wouldn't have a long-read sequencing technology in its lineup. The United Kingdom recently announced an investigation into Illumina's buyout of PacBio, so it's not out of the realm of possibility that the deal might not close.

Most likely to happen

In my view, the least likely of these three scenarios is the third one. While it's possible that Illumina could experience significant declines in the next 10 years, I definitely wouldn't bet on it happening. Illumina expects the PacBio acquisition to be finalized this year. I think that the transaction will close -- and put Illumina in a great position in both short-read and long-read sequencing markets.

However, I fully expect the competition from Oxford Nanopore, Roche, and others will intensify. My hunch is that these companies will make solid advances in improving accuracy. Scenario No. 2 is very possible, in my opinion.

But I think that Illumina will make advances in improving its accuracy, too. I also believe that the overall global gene sequencing market will grow at such a rapid rate that Illumina will be significantly larger 10 years from now.

My best guess is that the reality for Illumina in 2029 will reflect a hybrid between the first and second scenarios discussed earlier. If this prediction proves to be accurate, Illumina should be a great stock to buy now and hold for the long term.