LG Display, Apple, Universal Display, OLED, iWatch

Flexible OLED Display created by LG Display, Image source: LG Display

Head's up, Apple (AAPL -0.37%) fans, because your favorite Cupertino-based tech giant may soon confirm the iWatch is on its way.

That is, if an early report from Korean news site Digital Daily turns out to be true.

On Monday, Digital Daily briefly posted an article claiming LG Display (LPL -0.24%) has signed an exclusive agreement as the sole provider of 1.52-inch, flexible OLED displays for Apple's upcoming iWatch product. Even still, it's worth noting the site removed the article for unknown reasons only a few minutes after it was published -- but not before Google was able to cache a translated version for everyone to dissect.

According to the original report, LG is slated to begin mass production in July with an initial volume of 2 million units. What's more, these will be P-OLED -- or plastic OLED -- displays, which means they'll use the same durable technology introduced by LG in its new curved G Flex smartphone late last year. The G Flex, for its part, is slated to roll out in the U.S. over the next few months.

Take it with a grain of salt?
So why should we believe this rescinded rumor?

Putting aside the curiously specific nature of its claims, it would represent a logical next step considering The Korea Herald observed LG and Apple were nearing such a deal in November. What's more, only a few weeks earlier, the folks at DisplaySearch released flexible OLED supply chain speculation which pointed toward a late-2014 iWatch launch.

And that's also not to mention the fact that recent patent applications show Apple has been hard at work addressing color saturation issues of OLED, which previously made Apple CEO Tim Cook sneer at the thought of using the tech in his own company's devices.

Of course, that's great for LG Display, which is pressing hard to secure its place at the forefront of OLED development ahead of fellow South Korean rival Samsung (NASDAQOTH: SSNLF).

And remember, November's Korea Herald article also stated Samsung was notably absent among Apple's potential list of flexible OLED vendors, after talks between the two companies fell apart. Moreover, if LG Display is indeed Apple's sole supplier, it would mark an even bigger win considering KH also insisted Apple was in talks at the time with at least two other supplementary vendors, including both Japan Display and Taiwan's RiTDisplay.

LG may not be the biggest winner
But if you've followed my OLED-related musings here at Fool.com, you also know LG isn't the only winner here.

To the contrary, shareholders in Universal Display Corporation (OLED 2.96%) should arguably be more excited than anyone right now. As the owner of more than 3,000 issued and pending OLED patents, Universal Display not only licenses its intellectual property to both LG and Samsung, but also sells the efficient host materials required for both conglomerates to manufacture their OLED devices in the first place.

But keep in mind the comparatively tiny displays for Apple's iWatch likely won't do much to boost Universal Display's material sales volumes -- at least, compared to much larger volumes required to produce both smartphones and large screen OLED televisions.

That said, merely having Apple acknowledge the viability of Universal Display's flagship technology should go a long way toward convincing skeptics of its long-term viability. As a result, I'd expect a quick pop in shares of Universal Display if Apple and LG Display tie the knot.