What happened
Shares of Universal Display (OLED +10.68%) fell 18.3% in September, according to data from S&P Global Market Intelligence. In keeping with the display technology researcher's recent history, the stock made a big move in connection with news from smartphone giant Apple (AAPL +3.26%).
So what
Before Apple introduced the 2019 lineup of new iPhones, some investors had been speculating that every model would come with an organic light-emitting diode (OLED) screen. That would be good news for Universal Display, which collects royalties based on the screen size of such displays reaching consumers. But the OLED technology remained limited to the higher-end models, just like last year, leaving Universal Display's Apple business unchanged. The stock closed 9.8% lower that day.
Because it gets paid by the square inch, these big-screen TV sets matter more to Universal Display than tiny smartphone screens. Image source: Getty Images.
Now what
Other factors also weighed on Universal Display on Sept. 10, such as the CEO having sold a significant batch of shares and the tech sector having a bad day as a whole. But Apple has a tendency to move Universal Display's share price at the mere suggestion of OLED-related developments in the iPhone or iPad lines. In this case, the mere lack of OLED-centric iPhone news was enough to put pressure on the OLED expert's stock.
Long-term investors are better off watching Universal Display's progress in the big-screen TV market and the upcoming push into OLED lighting fixtures. Those opportunities will eventually dwarf the smartphone segment's impact on this company's top and bottom lines. For that reason, big share-price cuts based on smartphone news -- like September's plunge -- should be treated as a wide-open buy-in window.
