NEC has been reportedly in talks to sell its mobile phone unit Lenovo Group Ltd , a Reuters' source said on Friday. "Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided," NEC said in a statement through the Tokyo Stock Exchange on Friday in response to the media reports.

NEC is facing strong competition by Samsung and Apple. The company has reported two years of losses and is shedding assets to bolster profitability.

Last October, NEC cut its mobile phone sales target for the year ending March to 4.3 million from a previous estimate of 5 million units.

Lenovo, which is already NEC's personal computer venture partner, has been also rumored to consider buying Blackberry in the past.

Reuters' sources added that NEC is also in talks with potential domestic buyers.

In related news, Lenovo is considering getting into into the chip design business with a focus on smartphones and tablets, EE Times reported today.

The company plans to expand its IC design team to about 100 engineers by the middle of this year, according to a China-based industry source with direct knowledge of Lenovo?s recruitment of chip designers.

This initiative appears to be driven by the company?s desire to control its own destiny in smartphones and tablets.