Upside to Apple From Bigger China Play field

China Mobile has so far managed to overcome its 3G shortcomings by building out a nationwide Wi-Fi network. But the unavailability of an unsubsidized iPhone on the nation's largest wireless carrier is a serious deterrent to widespread 3G adoption. The fact that China Mobile has still managed to add about 15 million iPhone customers is testimony to the huge untapped potential.

Our estimates for Apple's market share do not take into account the availability of the iPhone on China Mobile's network. However, should it happen, the upside could be huge.

China Mobile had 10 million iPhone users in October 2011. In four months, it has added another 5 million, implying an addition of almost 1.25 million iPhone users to its network each month. For four months prior to October, China Mobile added 5 million iPhone users. So we can assume that the rate of adoption of unsubsidized iPhones on China Mobile's network has been fairly constant.