The first-generation Apple Watch uses a flexible OLED display, exclusively produced by LG Display. Digitimes now says that Apple is developing a Micro-LED panel to be used in a future Watch - to be released in H2 2017.
Apple acquired Micro-LED developer LuxVuew in May 2014, and according to this report has setup a micro-LED research lab in Taiwan in 2015.
Apple released the original watch in September 2014 (it started shipping in early 2015) - and still did not release a second-gen model, which is a bit strange for Apple. If the Micro-LED report is true, it will probably be for the 3rd-gen model. Older reports said that Apple contracted Samsung to become its 2nd flexible OLED panel supplier for the Watch 2.