Combining two fabulous technologies into one item always sounds like a winner. And the rumor that Apple's screamingly successful iPhone will be combined with the hot-to-trot next-gen display technology of OLED sounds more like a World-beater.
The rumor just surfaced thanks to a technology magazine called Smarthouse from Australia. According to the magazine's classic "unnamed sources" the recently-brokered deal between LG and Apple  for new displays is going to be less about LCD-based screens, and more about organic LED displays for the Apple iPhone 3.0, iPod touch and "netbook."
And that would make perfect sense in some senses. OLED tech  is both more contrasty and less power-gulping than back- or side-lit LCD display technology--when a pixel is black or dimly-colored, it simply consumes less or zero power from the device. The iPhone's battery is adequate, but never delivers what might be called "World class" performance. It's the excuse Apple gives when people ask why it's holding back on adding Flash support and background-running applications. And if, as we suspect, Apple's going to be baking in a slew of battery-munching GPS and LBS type options  into the next-gen smartphone, it's going to have to do something clever about the battery capacity or power efficiency of the phone's electronics.
If Apple snuck an OLED screen into iPhone 3.0 and its long-rumored (and still mythical) netbook/tablet then it'd have two extremely desirable products on its hands. But OLED tech is still expensive. It's breaking into the market for sure, and there are even some cellphones  and media players  that use it. Still...desirable as this rumor is, it's too good. So we're chalking it up as "unlikely" until more proof leaks out.