Display-driver supplier Himax Technologies (NASDAQ:HIMX) has just received a sucker punch. The stock was already in the doldrums this year, and the latest "unconfirmed reports" have dealt a hammer blow to Himax's prospects. Himax was widely touted to supply LCOS microdisplays for Google (NASDAQ:GOOG) (NASDAQ:GOOGL) Glass and attain glorious heights, but now there seems to be a question mark over those prospects.

The stock fell close to 14% on Tuesday after unconfirmed reports indicated that Google might not be using Himax's microdisplays, according to Fool contributor Steve Symington. TheStreet also carried a story along similar lines. 

Losing its wheels?
If this turns out to be true, then Himax shares might remain in free-fall mode. The stock had run up tremendously last year on the back of Google Glass prospects, only to lose more than 50% so far this year. In fact, Himax was trading at a rich earnings multiple even though its revenue and earnings growth slowed down.

When Himax reported its first-quarter earnings in May, its guidance left a lot to be desired. The company said that its current quarter's revenue would remain flat from last year due to inventory buildup at one of its major customers. Also, Chardan Capital Markets downgraded the stock to a "sell" rating.

Chardan analyst Jay Srivatsa went on to say that the Google Glass launch might happen in 2015. Himax hasn't expanded its LCOS panel capacity and the chances of a ramp-up in 2014 are minimal. As a result, the analyst firm slashed Himax's LCOS shipment forecast to 5 million units from the original 15 million, and also stated that even the current forecast is "aggressive." 

However, a decline in its LCOS ramp-up might also suggest that Google is not intending on using Himax 's solutions in Google Glass. Of course, Google had taken a 6.3% stake in Himax last year, and also has the option of increasing the stake to 14.8% through preferred share purchases. But what if Google doesn't opt for Himax at all?

Has Himax lost Glass?
Earlier this year, Google partnered with Ray-Ban maker Luxottica to make Glass a stylish product and expand its adoption. According to Luxottica's press release, "the two Corporations will establish a team of experts devoted to working on the design, development, tooling and engineering of Glass products that straddle the line between high-fashion, lifestyle and innovative technology." 

Note the words "design, development, tooling and engineering." What if the latest deal with Luxottica has led to a change in the way Google Glass is currently manufactured? Himax isn't the lone microdisplay supplier in the world, and there's a possibility that a different manufacturer's products might suit the Luxottica design better than Himax.

The success of Glass isn't guaranteed
Already, Himax investors have been burned a lot this year in anticipation of Google Glass. Recently, Sergey Brin indicated that he's not sure if we will see a Glass launch this year. The device has been in pilot phase for two years, and it has still not emerged from it. Moreover, Google Glass has been criticized for encroaching on privacy and creating distractions.

Lawmakers in Illinois have introduced legislation that bans the use of Google Glass while driving, even though the search giant lobbied hard to prove its point that Glass isn't a distraction. In addition, there have been a number of reports that indicate that Google Glass has been banned in restaurants, bars, and even pet stores.

At almost $16 million in lobbying costs, Google was the second-largest corporate spender last year. It has lobbyists in Delaware, Illinois, Missouri, and Wyoming to push Google Glass. However, it is facing resistance and that cannot be denied.

Final words
What if Google Glass turns out to be a limited-use product that you cannot use everywhere like your smartphone? What if it ends up being just a fashion accessory? Finally, what if Google ditches Himax altogether? The millions of units of microdisplay shipments that Himax investors have been counting on to drive its revenue might not happen after all. Relying on one customer is bad for a company's health -- remember Apple supplier Cirrus Logic? Counting on Himax to scale new highs on just the Google Glass is plain foolish -- small "f" intended.

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Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.