IBM puts PC business up for sale

NEW YORK: International Business Machines Corp. has put its personal computing business up for sale in a deal that could be worth as much as $2 billion, the New York Times reported.

IBM, now the No. 3 PC maker behind Dell Inc. and Hewlett-Packard Co., is likely to include all of its desktop, laptop and notebook computers in the sale, which could earn it between $1 billion and $2 billion, people close to the negotiations told the newspaper.

Lenovo Group Ltd., China's top PC maker, and at least one other company are said to be in talks with IBM, the Times reported. There have been media reports that Lenovo, which controls more than a quarter of China's PC market, was poised to set up a joint venture with IBM.

Gartner Inc., a leading research firm, forecasted earlier this week that three of the top 10 personal computer makers would exit the market by 2007, citing slower growth rates and narrower profit margins. It did not name any companies.

Despite its large size relative to smaller competitors, Gartner added that IBM and HP's PC divisions were vulnerable to being spun off "if their drag on margins and profitability are deemed too great by their parent companies".

IBM could not be reached immediately for comment.