iPhone 5 will have a Liquidmetal body after all

The test of a good rumor is that it simply. Will. Not. Die.

Liquidmetal is the name of a company that developed a new strong, light alloy, and it's marketing to anyone who uses weaker, heavier alloy in stuff like ... well, smartphones. Apple paid $20 million in 2010 for an exclusive license to use the alloy in consumer electronics. And the iOSphere waxed rhapsodic with hopes that the entire casing for the then-next iPhone would be made from the Wondrousmetal.

So far, Apple has only used it for the iPhone's SIM ejector tool. And one of the inventors of the alloy, Atakan Peker (wrongly identified by 9to5Mac as one of its investors), recently told Business Insider that this substitutionary approach is the most likely use for the alloy; it would be two to four years before Apple is likely to introduce something like a Liquidmetal unibody casing for a MacBook, for example, or some entirely new "breakthrough" product.

And then Liquidmetal CEO Tom Steipp appeared in an 86-second "talking head" video. It was posted on YouTube by a financial news outlet, and the video details indicate it was made for the Southern California Investment Forum. Even 9to5Mac recognized that this "looks to be a video aimed towards potential investors." But that didn't stop them, or others such as iPhone 5 News Blog's Michael Nace, from discerning Matters of Great Import in what is essentially a sales pitch.

Steipp "confirmed his company's involvement by announcing it is supplying Liquidmetal to Apple," reveals 9to5's Jake Smith, as though this was genuine news. He quotes Steipp from the video: "Our technology has been commercialized in a number of accounts, most recently by Apple computer ..." It may be that Steip is referring to some new part that will be appearing in future iPhone, but he could simply be referring to the SIM extractor tool.

At iPhone 5 News Blog, Nace sees the video as a deliberate campaign by Liquidmetal: "LiquidMetal Revitalizes iPhone 5 Form Factor Rumors Ahead Of WWDC" is his headline. "With less than a week to go before the kick-off of the Worldwide Developers Conference, LiquidMetal is injecting themselves back into Apple and iPhone 5 speculation," he writes, adding later, "The timing of this video cannot be overlooked ..."

"Now, with the WWDC less than a week away, LiquidMetal is once again making news, inciting the speculators to once wonder: is LiquidMetal going to show up at the WWDC?"

But a recent story at the stock market opinion site Seeking Alpha suggests that publicly traded Liquidmetal has been playing this card repeatedly, to spur both sales and its stock price, with rumor sites as willing accomplices.

Jason Kuepper notes that the company "has experienced a sharp run-up after rumors surfaced that Apple Inc. would include the technology in the iPhone 5 and future products. But what does that contract mean for Liquidmetal and its shareholders?"

The short answer is: It means whatever Liquidmetal can convince shareholders to believe or hope for. "Liquidmetal's recent run-up in share price may not be fully justified on the surface by rumors that Apple would include the technology in the new iPhone 5," Kuepper says, with masterful understatement. "After all, the $20 million [license] payment was already recorded and gave Apple exclusive rights to the technology, even in the overall consumer electronics industry." And as Kuepper notes, that $20 million is the "only financial upside" to result from the Apple deal.

"Despite this seeming downside, the license deal does provide the company with a great endorsement from one of the world's largest companies," Kuepper writes. "It also increases the company's brand recognition, thanks to the fact that the technology is named after the company. And, this could lead to additional sales by turning the product into a 'household name.'"

No kidding. Just Google "liquidmetal" and "apple."

Kuepper concludes: "Of course, these benefits are forward-looking and investors may want to wait until the Apple hype wears off. The company did not report a positive operating income as of last year and remains in the early commercialization stages."

The one potential problem with that advice is: The Apple hype will never wear off.