Citing people familiar with the matter, The Wall Street Journal reported that IBM is trying to sell its x86 server operation, with Dell looking at the business. Another source said that Chinese tech heavyweight Lenovo could be a potential purchaser.
An IBM spokesman told TheStreet the company doesn't comment on rumor and speculation. Lenovo also declined to comment. Dell has not yet responded to TheStreet's request for comment.
Nonetheless, a sale of the IBM's server business could make sense for the Armonk, N.Y.-based firm, which has spent recent years shifting its corporate focus away from hardware onto high-margin software and services.
IBM's lower-end commodity hardware, in particular, has been feeling the strain. During the company's fiscal third-quarter, for example, revenue from System x x86 servers fell 18% compared to the same period last year. In contrast, the company's high-end System z mainframe sales increased 6%.
The weakness in System x revenue was also evident in the prior quarters. During its fiscal first quarter, IBM's x86 server revenue declined 9% year-over-year while its mainframe business grew 7%. In the second quarter, System x was down 11% with System z up 10%.