If you've never heard of an organic light-emitting diode (OLED), this is as good a time as ever to start reading up. As the technology matures, the market for OLEDs is heating up, and everything from light bulbs to LCD displays to plasma TVs might soon be rendered obsolete by this rule-breaking technology

Industry pioneer Cambridge Display (NASDAQ:OLED) reported earnings last night, and the report contains several signs that OLED technology is ready for prime time. Management highlighted commercial opportunities presented by companies like Sharp and Toppan Printing, which are working on ultrathin high-definition displays and printable display panels, respectively, using Cambridge's patented Polymer OLED technology, or P-OLED.

The company is also going after developing markets in Brazil and Singapore, selling inkjet printing equipment (capable of printing out OLED material) to these ambitious governments. Of course, Cambridge does this with hopes of setting up significant display panel manufacturing operations in these countries sometime in the near future.

The financial performance was a mixed bag, with lower sales but a smaller net loss year over year, and revenues are shifting from research grants to commercial license fees and royalties. However, I did a double take when I saw R&D expenses dropping. That's the lifeblood of an emerging technology company like Cambridge, and I smelled foul things afoot.

As it turns out, there's a perfectly logical explanation. The $1 million decrease in research spending is a result of a $1.9 million reimbursement payment from P-OLED materials manufacturer Sumation. That's a joint venture between Cambridge Display and Sumitomo Chemical, intended to combine the manufacturing expertise of Sumitomo with the technological edge of Cambridge. Back out that reimbursement, and R&D spending was up by $0.9 million. That makes me a happy man.

Now, I should mention that I own shares in direct competitor Universal Display (NASDAQ:PANL), but I spent a long time waffling between Universal and Cambridge before committing my hard-earned dollars to an investment. The tiebreaker was provided by Universal's admittance to the ranks of Rule Breakers, and the supporting research notes from that service.

But I'm cheering Cambridge Display on anyway, because it's a huge market and there's room for several successful competitors. Gains from one company will only serve to open the window of opportunity a little bit further and to educate the public about the existence and benefits of OLED technology. So you go, Cambridge. Universal will help you blaze the trail, and I'm sure you both have bright futures.

Further Foolishness:

Universal Display is a Motley Fool Rule Breakers recommendation. Try a 30-day free trial to see why David Gardner took a shine to that company.

Fool contributor Anders Bylund is a Universal Display shareholder, but he holds no other position in any of the companies discussed here. His MP3 player has an OLED display, though he doesn't know which kind of OLED it is. You can check out Anders' holdings if you like. Foolish disclosure is your torch in the darkness of the financial markets.