How technology revolutionised the World Cup
Technological innovations made it easier for referees to give quick and clear decisions and improved the viewing experience for those watching football on TV.
What you’ll learn:Click to toggle accordion What you’ll learn:
Which innovations have revolutionised the game of football.
Why the technology sector is not for the faint-hearted.
How technological advances may create opportunities for investors.
Ever wondered why the footballs used in the 1970s were black and white?
The World Cup in England in 1966 was the first World Cup to be broadcast live to homes across the UK and via satellite in up to 75 countries. However, the plain-coloured ball proved tricky to see for many viewers with black and white television sets. As a result, Adidas, tasked with making the ball for the 1970 World Cup, included 12 black pentagonal panels to improve its visibility.
That may not be the most technologically significant milestone in the history of sport, but ever since technology has continued to revolutionise the game, both on and off the pitch.
Here, we look at a few of the technological changes which have had an impact on football, including advances used in this year’s World Cup in Russia, as well as some of the potential opportunities these may create for investors.
Bear in mind that investing in the technology sector can be a volatile experience, as it is often difficult to know whether companies will prove successful. There are plenty of examples of failures in innovative technology which have lost investors’ money over the years, so this is not a sector for the faint-hearted. Of course, with all investments there is the risk that you could get back less than you put in.
In the 2014 World Cup, we saw ‘vanishing spray’ used for the first time, which enables referees to spray a line on the grass for the opposition to keep behind when a free kick is taken. This appeared relatively basic in comparison to goal line technology, which was introduced in the same year to determine whether a ball has completely crossed the goal line.
This year, however, technology went one step further. Referees each wore a smartwatch, known as the ‘Big Bang Referee’. These watches were connected to the goal line technology, and vibrated and display the word “GOAL” whenever the ball crossed the line. They were made by Hublot, a Swiss subsidiary of French luxury good conglomerate LVMH, which also owns iconic brands such as Krug, Moet, Dior, Louis Vuitton and TAG Heuer.
Technology off the pitch
Billions of people around the world watched World Cup games live on television, with recent technological advancements enhancing the viewing experience for many fans.
The 2014 World Cup attracted 3.2 billion viewers, with over a billion watching the final alone.1 It is therefore no surprise that sales of television sets surge in the weeks before the event. In fact, John Lewis reported TV sales up a staggering 47% during the week before the opening game in 2014, compared to sales during the same week the previous year.2 But when it comes to choosing a new television set, it can be daunting keeping up with ever-changing technology.
There are two main choices, light-emitting diode (LED) televisions, or Organic LEDs (OLEDs). LED televisions are illuminated by LEDs arranged either in clusters behind the panel or on the sides. OLEDs differ in that they do not require a backlight – they emit their own light when a current is passed through. As a result, they require less battery power, and have revolutionised the tablet and mobile phone market. OLEDs are not only lighter than LEDs, which is great for mobile devices and laptops, but just think of the fuel savings when replacing the older screens fitted to the back of all 517 seats on an Airbus A380.
So, which companies are involved in the OLED market? The obvious ones are Samsung, the world leader in OLED screen production, and Apple, which uses Samsung-manufactured OLED screens in the iPhone X. Delving further into the production process, there’s Universal Displays - a US company which manufactures the diodes used by Samsung to make the screens. Explore further and you come across another US company called Applied Materials, which produces the machines to enable Universal Displays to make the diodes.
Where else might you have seen an OLED screen this summer? On the referees’ smartwatch.
Opportunities for investors
Over the coming decades, new technologies are expected to become an ever-increasing part of our lives from home entertainment and sport, to driverless cars and workspace automation. And this could provide opportunities for investors.
However, make sure you take a long-term view when investing in the technology sector, and expect some volatility during the time you are invested. The risks involved shouldn’t be underestimated, as it’s a specialist area with a higher than average potential for companies to fail or for technologies to become obsolete.
It’s possible to buy shares in an individual company, but this is a risky approach as it focuses on their specific product, market or service. Alternatively, investors may choose collective funds within the technology sector, and leave it to an active manager to seek out those companies who are set to benefit from the ‘next generation’ of technological disruption.
For example, in four years’ time, when you decide it’s time to replace your television for the next World Cup, you may find OLED screens have been replaced with something completely unheard of today. With technology moving at such a rapid pace, an actively managed fund manager has the opportunity to position the underlying portfolio in areas of growth and avoid last year’s technology.
Among the options available to investors is the Polar Capital Global Technology Fund (ISIN: IE00B42W4J83), which has been managed by the same team for over 10 years. The OLED industry is a theme that has been a part of the fund for over a year, but the fund can also invest in other businesses which are not technology companies but where technology is at the heart of what the company does – examples include media company Netflix and electronic commerce and cloud computing company Amazon.
Please bear in mind that our mentioning this fund should not be considered a recommendation. If you’re unsure where to invest, consider seeking professional financial advice.
Remember, the value of investments can fall as well as rise and you could get back less than you invest. We're not recommending Ready-made Investments as being suitable for you based on your personal circumstances. If you're unsure about this investment’s suitability for you, you should seek independent advice.
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