Analyst thinks Apple could sell as many as 40 million iPhones in China

by Phil Hornshaw

Apple’s second-most important market for mobile devices in the world is China, behind only the U.S. One analyst thinks the growth for the Chinese market for the iPhone and iPad maker could be huge during the next two years.

As Apple Insider reports, Morgan Stanley expects Apple to continue to expand its operations in China, partnering with China Telecom and China Mobile and adding them to its fold. (Currently, Apple sells the iPhone exclusively through China Unicom.) When it does, Morgan Stanley thinks that through the next calendar year, Apple will move as many as 40 million iPhones in China alone.

The numbers come from analyst Katy Huberty, who says that much of the potential of China has not yet been tapped by Apple or the iPhone, since the phone is only available from one carrier. Apple is only able to reach about 10 percent of 150 “high-end Chinese subscribers” throughout China, Huberty says, by making the iPhone available only through China Unicom. Most of the subscribers in China are on China Mobile, and of those, about an estimated 120 million spend more than 100RMB (about $16) per month on their phone service.

That’s a huge untapped market, and it would behoove Apple to get in with other carriers in the country. If Apple does spread out, Huberty’s conservative estimate is an uptick of 26 million sales through 2013; if things go really well, her bullish estimation is 40 million.

It’s possible Apple could see those kinds of numbers given the popularity of the iPhone even just among China Unicom subscribers. Apple was forced to cancel the launch of the iPhone 4S in China because customers waiting in lines at some Apple stores became unruly and the company said it feared for the safety of employees and customers. Slash Gear also reports that new rules for pre-orders for the phone will require that customers order online and use a government ID to purchase their iPhone 4S devices to combat scalpers, since demand there is so high.

Huberty guesses that given China Mobile’s push for a 4G LTE network, 2013’s Chinese iPhone could contain 4G technology, although she notes it’s too early to be sure. She also states that it’s likely Apple will partner with China Telecom, another competitor, before China Mobile. Morgan Stanley thinks that Apple could be bringing the iPhone to China Telecom within the next few months.

Already, China Mobile carries about 10 million iPhones, even though they run on 2G networks and aren’t officially supported by the carrier. Huberty says that based on Apple’s track record with China Unicom, moving to China Mobile could see a base level of 24 million subscribers in 2013, rising as high as 36 million.

Of course, take all these predictions with a grain of salt since it’s hard to tell what Apple is ever really up to, but given the importance of the Chinese market, it doesn’t seem too far-fetched. Morgan Stanley said back in October it thought China could surpass the U.S. as Apple’s largest market, and it doesn’t seem as though the investment bank has changed that opinion in the intervening few months.