Lenovo, China's largest personal computer and electronics manufacturer, is rumored to be in talks with IBM (IBM) to purchase all of the latter's worldwide computing unit.

The story first appeared today at NYTimes.com, and has fueled speculation over Lenovo's desires to be the world's personal computing powerhouse.

Established in 1988, Lenovo is the largest IT enterprise in China. For the year ended March 31, 2004, Lenovo reported a turnover of HK$23.2 billion and net profit of HK$1.05 billion. As of September 2004, with a market capitalization of about HK$19.6 billion, Lenovo employed about 9200 staff.

The article says IBM is in talks with another company, but Lenovo may be the best company to takeover the business, as most technology companies are outsourcing their productions to China already.

Worldwide, IBM has lagged in recent years behind Dell and Hewlett-Packard in the personal computing business. If a sale goes through, IBM is apparently still going to pursue businesses within the corporate server and technology consulting sectors.

In 1984, with an initial capital of 200,000CNY funded by the Chinese Academy of Sciences, 11 researchers formed the parent company of Lenovo. Currently, Lenovo engages primarily in the sales and manufacturing of desktop computers, notebook computers, mobile handsets, servers, printers, etc. in China. Lenovo brand PCs have been the best seller in China for seven consecutive years, commanding a 27.0% share of the China's PC market in 2003 (source: IDC). Lenovo PCs also ranked number one in the Asia Pacific (excluding Japan) with a share of 12.6% in 2003.