According to a report from Korean ET News (via DigiTimes ), Apple (NASDAQ:AAPL) has recently added Samsung (OTC:SSNLF) display to its Apple Watch supply chain. Additionally, the report claims that Samsung is currently sampling Apple with OLED displays for use in a next-generation iPhone.

The report claims that Apple will make a decision in November as to whether it will incorporate OLEDs into its next-generation iPhone or if it will ultimately end up using LCDs.

Let's see if this report makes sense and, if it does, what it might mean for Apple and members of the iDevice maker's supply chain.

An OLED in the iPhone 7? It could make sense
Apple CEO Tim Cook said back in 2013 that OLED displays were "awful." In particular, his beef with such displays at the time was that the color saturation was poor.

Since then, top-tier OLED displays have actually seen major advances in image quality and color accuracy. For example, in DisplayMate's review of the OLED display in the Galaxy Note 5, the display did very well in terms of absolute color accuracy.

OLEDs also offer a number of advantages over LCDs, including perfect black levels (which implies an infinite contrast ratio) and the lack of need for a backlight, which can help enable thinner devices.

In my view, moving to an OLED display for the iPhone 7/7 Plus could help enable a major boost in display quality from the iPhone 6s/6s Plus. Although I expect Apple to try to significantly improve display quality in each new generation, regardless of whether it chooses to go with an LCD or an OLED display, an OLED may be able to deliver an even bigger and/or noticeable boost in display quality.

What needs to happen for Apple to go with an OLED display?
There are a lot of factors that go into component selection for a device, especially one that ships in the volumes an iPhone does. Even if moving to an OLED display would lead to a bigger bump in image quality over the display found on the iPhone 6s/6s Plus than simply moving to a next-generation LCD, there are other factors to consider.

Perhaps the chief concern for Apple beyond product quality in making such a decision is cost. Can Samsung (the purported potential supplier of OLEDs to Apple) deliver OLEDs at a cost similar to an LCD alternative?

Additionally, DigiTimes recently reported that one of the concerns Apple has with respect to OLEDs is the lifespan of such displays. Unless a potential supplier can offer Apple OLEDs with similar lifespans to LCD alternatives, then OLED-based iPhone 7/7 Plus devices may be a no-go this round.

What would a transition to OLED displays mean for suppliers?
Japan Display is believed to be the key supplier of iPhone displays for the iPhone 6s/6s Plus cycle. If Apple sticks with LCDs for the iPhone 7/7 Plus, I'd expect Japan Display to get the majority of the orders for the 7/7 Plus cycle.

However, if Apple transitions to OLED displays, I could see both Samsung Display and potentially LG Display, which is a supplier of OLED displays for the Apple Watch, benefiting.

Another winner from an Apple transition to OLEDs might be Universal Display (NASDAQ:OLED), which licenses OLED technologies and sells materials used in the manufacture of OLED displays to display makers.

We'll know soon enough
After Apple decides what kind of display it will use in its next-generation iPhones, the company will need to inform suppliers of its plans. I suspect that shortly after the decision is made, analysts with sources in the Apple supply chain (i.e., KGI Securities' Ming-Chi Kuo) will get wind of Apple's plans and reveal them to the public.