What happened

Shares of Universal Display (NASDAQ:OLED) gained 10.4% in July, according to data from S&P Global Market Intelligence.

So what

The OLED technology researcher and license wrangler didn't have much news of its own to share last month, but the stock jumped every time Apple (NASDAQ:AAPL) sneezed in the general direction of OLED-equipped iPhones.

The smartphone titan from Cupertino has never used organic light-emitting diode screens in iPhones or iPads before, limiting its use of that technology to the Apple Watch product line. If the full line of iPhone 8 models turns out to have OLED screens, as rumor had it at several points in July, that would be a strong growth driver for Universal Display's top line.

A pile of smartphones, screens lit up in a variety of bright colors.

Image source: Getty Images.

Now what

One report even speculated that Apple might start up its own in-house OLED manufacturing facilities. That would make Apple a direct customer to Universal Display rather than going through third-party screen builders.

Even so, the real growth driver for Universal Display right now should be large-screen TV displays rather than smallish smartphones. One 55-inch television screen consumes as much OLED materials as 100 5.5-inch iPhones, so the math weighs heavily in the direction of TV-based gains.

I'm not saying that Apple's addition to the OLED family would be bad for Universal Display and its investors -- not at all. There's just a bigger market out there, and that's where shareholders like yours truly need to look for the next chapter in Universal Display's real growth story.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.