Japanese daily newspaper Nikkei is reporting via Reuters that NEC is planning to leave the smartphone business after a deal with Lenovo fell through.
Though the two companies have an existing relationship on PCs, NEC had also been in talks with Lenovo for some time in a bid to try to dig its way out of financial difficulties.
In selling the unit, NEC could drum up much-needed cash to push it back into profitability.
According to the report, NEC offered Lenovo a majority stake in its smartphone making subsidiary, currently held together by Casio and Hitachi as significant investors.
NEC doesn't have much of a presence in the U.S., but made a splash at Mobile World Congress (MWC) in Barcelona with a dual-screen smartphone. Besides an occasional glimpse now and again, there has been little in the way of Western love for the Japan-based electronics maker.
It does, however, have a significant presence in Japan, where it is based. While 5 percent market share does not appear like much in the U.S. or the Western market, for Japan it is a nonetheless significant slice of the pie.