Report: Apple's Next Phone Will Feature An OLED Screen

Apple Inc. (NASDAQ: AAPL) is looking to make big changes in the iPhone and manufacturer a smartphone with a crisp LED display.

According to a Bloomberg report, Apple is looking towards its suppliers in Japan to supply millions of OLED screens. The report added that Apple is engaged in talks with Sharp to procure OLED screens and Japan Display Inc. is also building its own OLED production facilities.

LED screens are typically found on high-end devices and pack a sharper punch. They're also more battery efficient and can even bend, which creates the possibility for new and radical designs.

Bloomberg suggested that each supplier would face costs as much as $2 billion to earn the rights to supply components for Apple's next phone - an investment that may be necessary to secure its future as part of Apple's ecosystem.

"If they don't invest in OLED, they will have to get out of the smartphone supplier business altogether," Bloomberg quoted Takeo Miyamoto, an analyst at MUFJ Morgan Stanley as saying.

Samsung Electronics is the clear market leader in the OLED space and is also a major competitor to Apple.

Meanwhile, shares of Tokyo-listed Japan Display rose more than 8 percent during the Asian trading session as the stock was upgraded by SMBC Nikko Securities to Outperform from Neutral.