The OLED Invasion Is Android-Powered

This would be a great time to jump aboard the OLED bandwagon. Wait too long and you might miss the launch of a real rocket stock.

Universal Display (Nasdaq: PANL  ) is a leading purveyor of organic LED (OLED) display and lighting technology. The company reported fourth-quarter earnings last night; it lost $3.8 million or $0.10 per share on $4.9 million of revenue. Compared to the year-ago quarter, that's a 15% smaller net loss and 35% higher sales performance. And the OLED train has just started a-rollin'.

OLED screens are a selling point for mobile gadgets like the Google (Nasdaq: GOOG  ) Nexus One smartphone and the Microsoft (Nasdaq: MSFT  ) Zune HD. Both of these products feature Universal Display's particular brand of OLED screens, so those product launches explain what Universal's sales growth is all about. Keep in mind that the OLED industry as a whole is still young and small -- the top screen-builder is Samsung SMD, which cranks out about 2 million OLED screens a month now but is expected to do something like 8 million monthly units by the end of 2010.

Universal Display partners Samsung, AU Optronics (NYSE: AUO  ) , and LG Display (NYSE: LPL  ) are all busy building out their OLED manufacturing plants and hope to move from small-screen applications like cell phones and media players to larger screens including television sets in the near future. Unit volumes will start out low, and prices for the brave early adopters will be sky-high, but as the manufacturing infrastructure matures over the next few years, OLED screens could become the gold standard for screens of every size.

Samsung and friends still wouldn't be able to supply enough OLED screens for a high-volume product like the Apple (Nasdaq: AAPL  ) iPhone this year, but check again in 2012 and there’s a good chance the iPhone 4G 2.0 will feature a Samsung-made OLED screen. By then, Universal Display should be solidly profitable, and it'll be too late to catch Mr. Market off guard.

So the time to invest is now, in my opinion. You could wait for another dip like the forays into $5 territory seen in 2009 -- but that day may never come again. You don't wait for a Rule Breaker like Universal Display to become a stagnant Rule Maker before buying in, because you'd miss all the fun and profit. Feel free to discuss your OLED investing strategy in the comments below.

Fool contributor Anders Bylund owns shares in Google and Universal Display, but he holds no other position in any of the companies discussed here. Microsoft is a Motley Fool Inside Value selection. Google and Universal Display are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (7) | Recommend This Article (17)

Comments from our Foolish Readers

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  • Report this Comment On March 16, 2010, at 5:08 PM, marv08 wrote:

    Well, Sony made an OLED TV set (11" for a mere $2,500) and discontinued it. OLED screens do not really work well in daylight and color reproduction is terrible (blocking of gradients, unnatural skin tones, unnatural contrast). I tried watching a movie on a N1, it is simply unacceptable, never seen so many people with red heads in my life, not even at the beach). This technology is not ready for prime time. And certainly Apple will not use it, before it is more mature. They do not care what others are doing.

    But at least you managed to find another reason to brag about Google/Android :-) 135k Nexus Ones sold since the launch. OLED not so hot?

  • Report this Comment On March 16, 2010, at 7:04 PM, gslusher wrote:

    I agree with marv08. Have noticed that the ZuneHD ads are nearly all in darkened areas? Also, the OLED uses more power when the pixels are white (all on) than black.

  • Report this Comment On March 16, 2010, at 7:05 PM, gslusher wrote:

    I agree with marv08. Have you noticed that the ZuneHD ads usually show the device in a dark area?

  • Report this Comment On March 17, 2010, at 4:47 AM, expatriot08 wrote:

    Samsung seems to have fixed the daylight problem with their newest OLED, introduced it the Barcelona moblie conference. I watched the side by side video of screens in sunlight and the new Super OLED now looks better than the competition. Add to that the fact that touchscreen technology will be incorporated into the OLED screen making it cheaper than buying separately.

    If OLED is not surpassed by another technology it will end up being the best quality and cost effective option.

  • Report this Comment On March 17, 2010, at 5:25 AM, expatriot08 wrote:

    http://www.product-reviews.net/2010/02/16/samsung%E2%80%99s-...

    I think the concerns and issues with OLED are being answered with newer models.(see link) There is a video of the comparison on youtube.

    Also AMOLED and touchsceen technology are being made together now and will end up being less expensive than LCD.

  • Report this Comment On March 17, 2010, at 8:06 AM, expatriot08 wrote:

    http://www.koreaittimes.com/story/7067/w...

    Here is a link for the embedded touchpad within OLED.

  • Report this Comment On March 17, 2010, at 11:08 AM, ade333 wrote:

    OLED is progressing so rapidly that looking at last years offerins in this feild is like comparing a commodore 64 to a modern PC. Just about every sector wants this tech to succeed. The next 20 to 30 years on planet earth are going to be heavy on conservation and this will either be a stepping stone or a bull dozer. Either way it seems like its good sense to get in on it now.

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