Apple (NASDAQ:AAPL) just announced another quarter of blowout results during the spring 2018 period. Fiscal third-quarter revenue advanced 17% and earnings per share rose 40%, driven in large part by the continued success of the iPhone.

However, Apple's revenue improvement resulted more from the impact of higher pricing than increasing demand for the iPhone. Consumers choosing higher-end models obviously bodes well for Apple itself, but a downtrodden technology patent holder could be one of the biggest beneficiaries of the smartphone maker's success.

The pundits have been wrong all along

iPhone sales are huge. The fiscal third quarter is usually a sleepy one for Apple as smartphone sales decline in anticipation of the new lineup released in the fall. Nevertheless, iPhone revenue made up 56% of total revenue in the quarter at $29.9 billion. The number of phones sold only increased 1% from the same period in 2017, but revenues soared 20% higher.

Two iPhone X smartphones, one viewed from the back and the other with the OLED screen facing forward.

Image source: Apple.

The big bump can be chalked up to the higher pricing on this year's models. The iPhone 8 and 8 Plus starting prices were $50 and $30 more than the iPhone 7 and 7 Plus models, respectively, but the real kicker is the X -- at $999, it's priced 40% higher than the base-model 8. CEO Tim Cook reported that the X remained the most popular Apple choice since its debut, once again silencing pundits claiming the popularity of the premium phone was waning.

The most prominent feature on the X is its ultra-high-definition screen powered by OLED technology. The inclusion of this technology in the iPhone family was big news for OLED patent holder and materials seller Universal Display (NASDAQ:OLED) in late 2017; so big, in fact, that shares were pushed unsustainably higher. The stock subsequently fell by more than half from its all-time high after management said revenues would decline slightly in the first half of 2018, but the success of the iPhone X could reverse the trend.

OLED Chart

Data by YCharts.

It's in the display

Universal Display's management has maintained that the company's lull was only temporary. As manufacturers gear up for new product lineups, the organization expects to return to growth late in the year. Apple's success would seem to support this. At one time, some analysts predicted the company would completely ditch OLED, as it's still a more expensive technology than LCD (liquid crystal display). Now predictions hold that at least two new iPhones will boast OLED screens given their warm reception over the last three quarters.

This matters because Apple's global phone market share has been inching up in recent years, flirting with 20% at the end of 2017. Apple's sales success helps Universal Display, but more importantly, the Cupertino-based company could be ushering in an era in which OLED screens become standard. As the patent holder for the technology, Universal Display benefits no matter who makes use of the displays, as it receives royalty fees when manufacturers include OLED in their product designs.

Two-thirds of the global smartphone industry market share is held by manufacturers other than Apple and market share leader Samsung, which started using OLED in its Galaxy phones a couple years ago. As its numbers of smartphones sold taper off, Apple is still winning, since consumers are springing for premium features and stomaching the higher pricing. This could cause other smartphone makers to try and follow suit.

None of the above, of course, includes TV sales. Ultra-high-definition OLED TV pricing continues to fall each year, convincing more consumers to upgrade. Since Apple's test run of the technology has yielded blockbuster returns, Universal Display could be the biggest winner after Apple's last report. Look for the number of iPhones featuring an OLED screen when Apple announces its 2018 lineup in September.

Nicholas Rossolillo and his clients own shares of Apple and Universal Display. The Motley Fool owns shares of and recommends Apple and Universal Display. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.