Apple is developing its own MicroLED device displays and has made small numbers of the screens for testing, Bloomberg reported on Sunday.
The iPhone maker is developing next-generation MicroLED screens at a secret plant in California and has made a huge investment for this, according to the report.
The secret project, code-named T159, is overseen by Lynn Youngs, who is in charge of iPhone and Apple Watch screen technology, Bloomberg said, citing people familiar with the matter.
The company will aim to use the new technology in its wearable computers first, it said.
Apple could not be immediately reached for comment.
MicroLED screens are flat panel displays that make gadgets thinner, brighter and uses less power compared with current OLED displays.
It is unlikely that the technology will reach an iPhone for at least three to five years as MicroLED screens are more difficult to produce than the current displays, Bloomberg said.
Apple currently designs chips for its mobile devices and a move into displays could hurt screen makers like Samsung Electronics, Japan Display Inc, Sharp and LG in the long term.
Last year, chipmaker and Apple supplier Dialog Semiconductor acknowledged that Apple could develop its own power chips.
Sharp shares fell 2.6 percent, while Japan Display's shares fell 1.5 percent and LG Display's stock fell 1.4 percent on Sunday.
The move could also affect Apple's suppliers like Synaptics, which makes chips used in touchscreen technology, Bloomberg said.
(Reporting by Lawrence Delevingne in New York and Abinaya Vijayaraghavan in Bengaluru; Editing by Amrutha Gayathri and Gopakumar Warrier)