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Sept. 30 (Bloomberg) -- Liquidmetal Technologies Inc. has been betting on partnerships with Apple Inc. and Swatch Group AG. It hasn’t paid off yet.

The company developed a metal that’s moldable like plastic and has formed perpetual exclusivity agreements with Apple for consumer electronics products, and with Swatch for watches. While Liquidmetal has succeeded in being included in some of Swatch’s products, the Rancho Santa Margarita, California-based company is still waiting for a big break with Apple.

When the Apple Watch was presented on Sept. 9, Liquidmetal’s shares plunged 26 percent, the most since July 2013, because Apple didn’t say whether Liquidmetal’s technology would be incorporated in its new products. The two exclusivity agreements could spell further trouble, as the royalty-based license with Swatch for watches hinders any use in products such as an Apple Watch.

“I suspect a third-party company would have to come to a legal agreement with Liquidmetal and Swatch before it could use Liquidmetal technology for a watch,” said Rene Weber, an analyst at Bank Vontobel AG in Zurich. “In this area, Swatch certainly has a strong position.”

Bill Johnson, a professor at the California Institute of Technology, helped develop the material, and Liquidmetal licensed it. Before signing the agreement with Apple in 2010 and Swatch in 2011, Liquidmetal made mobile-phone parts for Nokia Oyj and Motorola using earlier technologies, as well as watch cases for TAG Heuer and Casio Computer Co.

Tech Partners

“When we looked at alternatives, we felt partnering with larger companies was the best way to take our technology to the next level and build the credibility we need to accelerate adoption,” Chief Executive Officer Thomas Steipp said in a phone interview. “Both Apple and Swatch are great tech partners, and we obviously would like to see Liquidmetal be used in the most advanced ways by our licensing partners.”

Liquidmetal has had some advances in the watch industry. Swatch has used the alloy for watches including the Omega Seamaster Planet Ocean in 2009 and a 2010 Breguet model that plays Rossini’s “The Thieving Magpie” aria.

The material “is ideal for watches because the alloy is extremely durable, flexible, and much harder than steel,” Swatch Chief Executive Officer Nick Hayek said in an interview in August. The company plans to continue to work with Liquidmetal on other projects, he said.

Amorphous Alloys

Liquidmetal manufactures and sells bulk amorphous alloys, which it describes as metal materials that are highly resistant to stress and corrosion. Liquidmetal alloys are similar to titanium alloys, though they are stronger and can be molded like plastics.

In May, the company extended an agreement with Cupertino, California-based Apple through February that provides the company financial and legal support for the filing of patents. Liquidmetal also in May reached an agreement to settle a dispute with contract manufacturer Visser Precision Cast LLC, allowing the company to form more licenses to produce the material.

Steipp said areas of potential growth include medical products, aerospace defense and sporting goods. Liquidmetal is most likely to be used in handheld items, he said. He declined to comment on Liquidmetal’s share price decline after the Apple product announcement.

To contact the reporters on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net; Jan Schwalbe in Zurich at jschwalbe6@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Thomas Mulier, David Risser

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