IPhone 4S goes to China

Capitalizing on the huge demand for Apple's smartphone, China Unicom should be able to increase its mobile market share.

China Unicom (CHU 0.00%) will finally be able to sell the long-awaited iPhone 4S in mainland China, according to a report in the Beijing Morning Post.

China's Ministry of Industry and Information Technology has issued a network permit to China Unicom, the country's second largest carrier, to sell the phone from this month onward, making it likely that the phone will be available for Christmas. Since its debut in October, Apple's (AAPL 0.00%) iPhone 4S has ruled smartphone sales for two consecutive months at the three major carriers in the U.S.: Verizon (VZ 0.00%), AT&T (T 0.00%) and Sprint (S 0.00%).

Our price estimate for China Unicom stock is $24, which is around 14% ahead of market price.

See our full analysis for China Unicom's stock here 

Mobile share to increase

China Unicom is the No. 2 wireless carrier in China, with close to 200,000 wireless subscribers. This compares impressively to about 90 million for Verizon, the largest carrier in the U.S.

This gives China Unicom a huge subscriber base to address and market the iPhone 4S, which has already sold millions globally. However, China is a developing economy and high smartphone prices are a deterrent for many. Smartphone penetration was only around 15% in China in 2010; however, as the country grows and the average Chinese sees more buying power, the demand for smartphones will increase exponentially.

In fact, we have already started seeing increasing appetite for the iPhone 4S among the Chinese. When Apple began taking pre-orders for the iPhone 4S in Hong Kong last month, it sold out within 10 minutes. Capitalizing on the huge demand for the iPhone 4S, China Unicom should be able to increase its mobile market share in China.

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ANALYSTS RATINGS

Zacks average brokerage recommendation is Strong Buy

RECOMMENDATIONS	CURRENT	1 MONTH AGO	2 MONTHS AGO	3 MONTHS AGO
Strong Buy	4	4	4	4
Moderate Buy	0	0	0	0
Hold	0	0	0	0
Moderate Sell	0	0	0	0
Strong Sell	0	1	1	1
Mean Rec.	1.00	1.80	1.80	1.80

• 1.0 = Strong Buy
• 1.1 thru 2.0 = Moderate Buy
• 2.1 thru 3.0 = Hold
• 3.1 thru 4.0 = Moderate Sell
• 4.1 thru 5.0 =  Strong Sell