10 Things Not to Buy in 2010

SmartMoney

Ten years ago, most homes relied on dial-up connections to access the Internet and iPods, flat-screen TVs and the Nintendo Wii didn't exist.

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In 2010, consumer should expect to see more revolutionary products supplanting old mainstays. In media, DVDs, books, newspapers and magazines will continue to lose ground to services like in-home movie rentals and gadgets like the Amazon (AMZN) Kindle. In big-ticket items, the push for energy efficiency will continue to influence consumer decisions on cars and home upgrades.

As a result, some consumer products appear poised for a dip in sales, which could be a prelude to obsolescence. Here are 10 items not to buy in 2010.

DVDs

The days of going to a video shop to rent a movie are at an end. In September, Blockbuster (BBI) said it plans to close roughly 22% of its stores by the end of 2010; meanwhile, third-quarter revenue was down 21% from the year-ago period. (The company didn't return calls for comment.)

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Looking ahead, DVD purchases could turn cold, as well. On average, DVDs sell for at least $20 each. That's pricier than signing up for Netflix (NFLX) or renting movies from cable providers' on-demand channels. Netflix charges as little as $8.99 a month to rent one DVD at a time (with no limit to the number of monthly rentals).

Time Warner Cable offers thousands of movies on demand for around $4.99 each. Verizon Fios cable service charges $5.99 a month to download unlimited movies.

Home Telephone Service

It will probably take a while, but home landlines could become as archaic as the rotary phone.

According to a Centers for Disease Control and Prevention study, more than one in five U.S. homes (22.7%) had cellphones — and no landlines — during the first half of 2009, up from 10.5% during the same period in 2006.

Ditching your home phone is easier now than it has been in the past, as cell phone companies compete for greater market share and alternatives to the home landline continue growing. For example, magicJack provides phone service when it's plugged into a computer's USB port and a home phone. It costs $39.95 and includes a one-year license for calls in the U.S. and Canada; after that, service costs $19.95 per year. (By contrast, Time Warner Cable's digital home phone service costs $39.95 per month.)

And, consider Skype, which is free when you communicate with other Skype users; this software application uses the Internet as a platform to make calls, hold video conferences and send instant messages.

External Hard Drives

Consumers who keep their computers for years and upload thousands of songs, videos, movies and photos will need to get more space at some point.

External hard drives are one option, but an up-and-coming alternative might be simpler and save you another transition down the road. Online backup services, like Carbonite.com or Mozy.com, allow users to back up data over the Internet.

These services are more expensive than purchasing an external hard drive, which typically starts at around $70. At Carbonite.com, a one-year subscription starts at $54.95, and at Mozy.com monthly subscription costs total $54.45 for a year.

Smartphone Also-Rans

In the past few years, several smartphones hit the market with similar features to the iPhone and BlackBerry, but they haven't generated the same buzz. As a result, fewer developers are likely to create applications and other products that cater to those phones.

Today, the BlackBerry dominates the smartphone market with 40% market share, followed by the iPhone with 25%, according to data released by ComScore in December. In the near term, both are expected to stay at the top. ComScore found that most consumers who'll be shopping for smartphones in the next three months plan to purchase a Blackberry (51%) or an iPhone (20%).

By contrast, only 5% of respondents said they planned to purchase T-Mobile's MyTouch. The Palm Pre and Palm Centro received 2% and 1% of the vote, respectively.

A possible upcoming competitor that could shake up the space is Google's (GOOG) Android. According to ComScore, as of October, the Android's market share had doubled to 3.5% in the past year.

Compact Digital Cameras

For nearly a decade, digital compact cameras were must-haves for most consumers.

But during the past several years, another type of digital camera has been slowly rising in popularity: the single-lens reflex (SLR) camera, from manufacturers including Nikon, Canon (CAJ), Sony (SNE) and Olympus. Although bulkier, these cameras produce pictures that more accurately represent what's in their viewfinders than those that use older technology.

They're also pricier. For example, Canon's digital compact cameras start at $110, while the SLRs start at $570.

Newspaper Subscriptions

The past few years have been unkind to the publishing industry.

In 2008, newspaper advertising revenues declined by 17.7%, according to the Newspaper Association of America. Meanwhile, average daily circulation at 379 newspapers fell 10.6% from April through September 2009, compared to the same period a year ago, according to the Audit Bureau of Circulations.

Magazines haven't fared any better. In 2009, more than 360 magazines shut down. During the first half of 2009, ad pages fell 27.9% when compared to the same period in 2008, according to Publishers Information Bureau.

The morning newspaper has been replaced by a growing online media presence — much of which is accessible for free. The Amazon Kindle — even with its price tag of around $250 — and other eBook readers could increasingly become one-stop sources to access newspapers, magazines and books.

CDs

When was the last time you bought a CD or even walked into a record store?

The past decade was one of the worst for the industry. In the beginning, there was Napster. Then came iTunes, which was introduced in 2001 and offered affordable pricing and easy accessibility. Face it, CDs aren't coming back.

Record stores are feeling the pinch. Most Virgin Megastores in the U.S. have shut down following declines in sales and revenues. In 2004, Tower Records entered bankruptcy and by 2006 most locations had closed.

New College Textbooks

Unless a student absolutely needs brand-new textbooks, they can use several alternatives to save.

Shop for used textbooks, which can help you save 70% to 90% off the retail price, says Mike Gatti, the executive director at the Retail Advertising and Marketing Association, a trade group. Check out web sites like CheapestTextbooks.com, Booksprice.com or Amazon.com. Many college bookstores also sell used texts.

Another option is downloading books online. Sites like Coursesmart.com sell subscriptions to digital copies of more than 7,000 textbooks. TextbookMedia.com allows students to download textbooks for free. You can also rent textbooks on Chegg.com.

Gas-Guzzling Cars

Skyrocketing gasoline prices dominated headlines during most of the decade, and they remain volatile.

The Energy Information Administration estimates that crude oil prices will average around $77 a barrel for the fourth quarter of 2009, up from $42.90 in the first quarter. The EIA also projects prices will rise in 2010 to their highest point in more than two years: $81.33 a barrel.

Recent announcements by car manufacturers to mass produce fuel-efficient cars could help push consumers away from gas-guzzling vehicles.

According to the Department of Energy, the most efficient cars include the Honda Civic Hybrid, which gets 40 miles per gallon (mpg) in the city and 45 mpg on the highway, the Volkswagen Jetta and Golf (both run on diesel), which each get 30 mpg in the city and 41 mpg on the highway, and the Toyota Prius hybrid (51/48 mpg).

Energy-Inefficient Homes and Appliances

Ten years ago, shopping for home upgrades involved looking at a product's functionality and aesthetic. Now, there's another component: energy efficiency.

Today, the products most touted by manufacturers and retailers are those that are Energy Star certified and those that meet new federal environmental standards — most of which have higher price tags than their counterparts but help to lower heating and cooling bills.

The government is offering a federal tax credit of up to $1,500 on energy-efficient home upgrades through Dec. 31, 2016. But many are set to expire by Dec. 31, 2010; these include eligible insulation, roofs and windows and doors.

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