Imagine iPhone 5 looking as though it is made of a liquid metal, and feels like a liquid to the touch. Imagine a case more than twice as strong as titanium. Imagine no scratches or smudges.
If Apple (AAPL) pulls off such an innovation in iPhone 5, it will be a coup, giving Apple another edge over its competitors. A recent SEC filing provides fresh evidence that Apple seems to be very interested in dealing with a company that makes such “liquid metal.”
A small company named Liquidmetal Technologies (LQMT). The company has developed a series of amorphous metal alloys that are sold under the commercial name Liquidmetal. These alloys were originally developed atCalifornia Institute of Technology (CALTECH).
Liquidmetal alloys are made of a mix of titanium, nickel, copper and zirconium, among other metals. These materials feel as smooth as liquid or glass when touched; hence the name Liquidmetal.
These materials offer high tensile strength, excellent resistance to corrosion, and strong resistance to scratches. These materials can be easily cast and molded using heat similar to thermoplastics.
Apple has an exclusive agreement to use Liquidmetal technology in consumer electronics. For background please see Apple iPhone 5 And The Insanity Of Liquidmetal Speculation.
The new evidence that Apple is serious about Liquidmetal is found in the 8-K filed by Liquidmetal Technologies, Inc with SEC on June 18, 2012. Here is the relevant portion from the 8-K:
On June 15, 2012, Liquidmetal Technologies, Inc. (the “Company”) and Apple Inc. (“Apple”) entered into an amendment (the “Amendment”) to the Master Transaction Agreement that they previously entered into on August 5, 2010 (the “MTA”)… Under the Amendment, the parties agreed to amend the MTA to extend the February 5, 2012 date to February 5, 2014.
I have previously written that under the prior agreement Liquidmetal had licensed its technology to Apple on a pre-paid basis. Therefore there would be no direct impact on Liquidmetal if Apple were to use its technology in iPhone 5.
The 8-K raises a new question. What did Liquidmetal Technologies get from Apple in return for the extension?
The answer is that it is a mystery. According to the SEC filing,
The foregoing does not purport to be a complete description of the Amendment and is qualified by reference to the full text of such agreement, which will be filed with the Company’s next Quarterly Report on Form 10-Q.
Even though the impact on Liquidmetal is not quite clear, it is clear that if Apple uses Liquidmetal on iPhone, it will be big.
Since buying Apple at an average price of $131, there have been only a handful of times when I gave signals to new subscribers to buy Apple. If there is a confirmation of Apple’s use of Liquidmetal I am likely to issue another signal to initiate a position in Apple for those who do not own Apple. I may also issue a signal to subscribers to add to the existing position.
About Me: I am an engineer and nuclear physicist by background. I have founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com. Follow me here and get email notification when I publish a new article.