Huawei, which is fighting US sanctions, is apparently thinking it is better to  focus on its higher end Huawei phones rather than the Honor brand which is aimed at young people and the budget conscious, they said.

The assets to be sold have yet to be finalised but could include Honor’s brand, research & development capabilities, and related supply chain management business, two of the people said.

The deal may be an all cash sale and could end up smaller, worth somewhere between 15 billion yuan and 25 billion yuan, one of the people said.

Digital China is the main distributor for Honor phones, but other prospective buyers include Chinese electronics maker TCL and rival smartphone maker Xiaomi.

Kuo Ming-chi, an analyst at TF International Securities said: “If Honor is independent from Huawei, its purchase of components will no longer be subject to the US ban on Huawei. This will help Honor’s smartphone business and the suppliers.”

Honor made up 14.6 million, or 26 percent of the 55.8 million smartphones Huawei shipped in the second quarter of this year, according to estimates from research firm Canalys.