The move is believed to be part of IBM's efforts to shift from being a manufacturer to a service provider, analysts said.

IBM has sold out or spun off most of its low-end manufacturing units in recent years, and is now focusing on providing IT solution services to clients.

On its cooperation with China's largest computer maker Lenovo, Victor Fung, the company's global technology services executive, said: "IBM has gradually handed over our personal computer and low-end technology businesses to Lenovo in recent years."

"In the future, we will mainly concentrate on technical support and consultancy services, but IBM still relies heavily on Lenovo's network to expand its turf in the market," Fung added.

Lenovo purchased IBM's loss-making personal computer assets for $1.25 billion in 2004.

IBM got a stake of nearly 19 percent in Lenovo as part of the deal. The company is selling 3.5 percent of its Lenovo shares for HK$3.2 to HK$3.3 per share for HK$990 million.

Analysts said the move had come at the right time, as Lenovo's Hong Kong-traded shares soared last week after it announced its best quarterly results since the IBM deal.

(China Daily 02/08/2007 page14)

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