It's huge news for investors in Universal Display (NASDAQ:PANL) when electronics giant Sony (NYSE:SNE) says that it will sell OLED televisions in the Japanese market, starting Dec. 1. The thing is 11 inches across, but just three millimeters thick. Sorry, I mean thin.

Impatient geeks like myself have been waiting for such an announcement for years, and hope that it's merely the starting shot of the inevitable race to replace the television screens and light bulbs of the world with organic light-emitting diode (OLED) technology, which Universal Display develops and sells.

Now, this particular screen probably won't be a big seller at first. The price tag is a hefty 200,000 yen, or about $1,700 American, which puts this tiny set up against 50-inch plasmas on a pricing basis. And even then, Sony's announcement makes it sound as if it's selling the OLED screens below cost.

That's the price you pay for being on the hemorrhaging edge of technology. OLED technology isn't exactly new to Sony: The company has used it in handhelds for three years, but those screens are a mere 3.8 inches. It takes time to scale up an entirely new manufacturing process, ironing out the technological wrinkles along the way.

Even Katsumi Ihara, executive deputy president of Sony, thinks that we're some distance away from the full-on revolution. "I don't think OLED TVs will replace LCD (liquid crystal display) TVs overnight," he said. "But I do believe this is a type of technology with very high potential, something that will come after LCD TVs."

Let Sony, Philips (NYSE:PHG), Matsushita's (NYSE:MC) Panasonic, and the rest of the large-screen elite put OLED televisions through the paces to figure out how to make them cheaper and longer-lasting, and prices should come down dramatically in a couple of years. I can't help but be reminded of Adam Sandler's The Wedding Singer, where playboy Glenn gets the jump on new technology in 1985: "It's called a CD player. It cost me, like, seven hundred bucks, but the sound quality's outstanding."

Yeah, it's like that. Blu-ray and HD DVD players have seen their price tags just about halved in a year and a half, and OLED will go the same way. And Universal Display is laughing about it, all the way to the bank, as the licensing checks start to roll in.

Further Foolishness:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.