IBM to sell PC business?

Speculation is mounting that IBM will stop selling PCs, exiting an industry it was central in helping create just over 20 years ago.

A report in today's New York Times cites "people close to negotiations" saying as much. It puts forward China-based Lenovo, formerly known as Legend, as the likelier buyer of the unit for between $1bn and $2bn.

In recent years few companies have made much money from PCs. Dell and some Asian manufacturers have done well but IBM's unit has been frequently loss-making. This year analysts expect a pre-tax profit of under $100m. IBM as a whole pulls in over $90bn annually, the largest turnover in tech, but much of it is from lucrative services and software sales, with even some server lines facing challenges.

A spokesman at IBM fielding calls on the sale rumours could not be immediately contacted for comment.

In an interview in The Wall Street Journal this week, HP CEO Carly Fiorina insisted her company's PC business won't be sold and must become profitable again.

However, Gartner as recently as last week said both HP and IBM - and one other, unnamed top 10 PC-maker - "are vulnerable to being spun off".

Other experts have insisted it will make sense to jettison loss-making units and IBM CEO Sam Palmisano has been unsentimental about selling operations such as the company's hard drive business.