NEW YORK (TheStreet) -- Apple's (AAPL) deal with China Mobile (CHL) isn't done quite yet, despite the world's largest carrier already taking pre-orders for the new iPhone 5s and iPhone 5c. But that hasn't stopped Wall Street from speculating on how many iPhones will come to China Mobile in 2014.
Morgan Stanley analyst Katy Huberty, who rates shares "overweight" with a $630 price target, said she believes Apple could wind up shipping 12 million iPhones to China Mobile in calendar 2014, which could boost earnings by $2.30 a share.
Analysts surveyed by Thomson Reuters expect Apple to earn $43.45 a share on $184.12 billion in revenue for fiscal 2014, which began on Sept. 29, 2013.
Huberty noted there is an addressable market for Apple of 195 million customers, which would imply 29% of the market for Apple, up from its 21% long-term average. Huberty did a survey in July of those willing to spend 5,000+ RMB on a smartphone to come up with the 29% number; the survey only included those who said they were very likely to buy a China Mobile iPhone.
China Mobile reportedly has started taking pre-orders for the iPhone for its network, though nothing official has been announced. Apple declined to comment on the pending announcement of a deal last week, following iPhone 5s images that China Mobile had put up on its Web site to pre-order the phone. The image and links have since been taken down.
Last month, China's official state news agency, Xinhua, reported that China would start commercial use of the 4G network and services starting Dec. 18, bringing high-speed Internet access, data and advanced smartphones to the world's most populous country. China Mobile has around 760 million subscribers currently, with approximately 176 million of them being 3G users, the demographic Apple is targeting.
Though Huberty only forecasts 12 million iPhones for China Mobile for next year, given the newness of the phone to the carrier (there are iPhones on China Mobile's network, perhaps as many as 15 million, despite the two companies not having an official deal), there could be the potential for many more.
Huberty's bull case noted there's the possibility for 23 million iPhones in 2014. "This assumes an addressable market of 279M in 2014 and includes respondents that were otherwise not planning to purchase a smartphone in the next year," Huberty penned in a note.
Of course with every bull case, comes a bear case given the enormous expense for the iPhone in China, and the potential for China Mobile to be less aggressive with its subsidies.
Earlier in the month, details were leaked that the off-contract price of an iPhone 5s on China Mobile will start around 5,300 RMB, though nothing has been made official. There will be subsidies for those who sign two-year contracts, but nothing is official.
Huberty's bear case suggested only 5 million iPhones sold, adding just $1 in earnings per share, as the addressable market (121 million) is much smaller than expected, and "excludes current iPhone owners that were planning to purchase a non-Apple smartphone but expected to change their mind if a China Mobile iPhone became available."