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5 Industries That Are Doomed to Fail

Stocks in this article: IMN T VZ CTL KO PEP DPS TUC NFLX CSTR

4. The wired telecommunications carrier industry is made up of local, long-distance and international phone-service providers that rely on hard-wired (think telephone lines) technology to send their signals. Its threat comes from the worldwide shift to mobile communications, led by cell phones.

"In recent years, the continuous emergence of new technologies, like naked DSL (digital subscriber line) and voice over internet protocol (VoIP) technologies, and rapidly falling cell phone prices are making this industry particularly risky," IBISWorld says.

But the industry is seen maintaining a core business, as its high barriers to entry, such as stringing new phone lines, means it doesn't face new competition.

The big players in the industry are AT&T (T), Verizon (VZ) and CenturyLink (CTL), and each has diversified into wireless technologies to keep their businesses profitable.

Indicative of the industry's changes, Verizon's wireline division, which includes business- and home-telephone services and its FiOS television offering, continue to contract as more customers made the switch to wireless phone service. In the third quarter, Verizon's wireless revenue fell 1.3%, but it still was a $10 billion business.

3. Soda production, or the manufacture of carbonated soft drinks, now a $17 billion industry, is seen shrinking by 2% per year over the next five years as consumers switch to other, and in most cases, healthier types of beverages.

A core of Coca-Cola (KO) and Pepsi-Cola (PEP) drinkers is expected to remain loyal to their brand, but demand for carbonated soft drinks is seen slowing due to increased competition from energy and sports drinks and ready-to-drink teas and coffees, not to mention bottled water.

Also hurting their prospects is that some state and local governments have proposed or enacted taxes on soft drinks and eliminated them from schools, in order to fight obesity and diabetes. For example, Washington state has imposed a 2-cents-per-12-ounce tax on carbonated beverages since 2007.

Alternative beverage categories have also stepped up their marketing campaigns and gained market share. In 2011, Coca-Cola dominated the carbonated soft drink market in the U.S., with a 16.7% share, followed by Pepsi-Cola at 9.2% and Diet Coke with 9.1%.

These companies have diversified their beverage product offerings to offset declines in carbonated soft drinks but are also seeing steady growth in foreign markets for their carbonated products.

Dr Pepper Snapple Group (DPS) is the third-largest flavored carbonated soft drink maker in the U.S.

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