According to Giz-China, Apple has reached a landmark agreement with China’s and world’s biggest and most valuable wireless operator, China Mobile, that will see the two companies join forces on bringing a next-generation iPhone to China Mobile’s fourth-generation TD-LTE network:

China Mobile claims that it has reached an agreement with Apple to bring to bring its 4th generation TD-LTE mobile data connection to the next generation iPhone. The claim isn’t exactly new news as it was originally reported back in May, and doesn’t specify which model of iPhone it will be in, but could hint at the next generation iPhone actually being an iPhone 4S type device, with updated 4G capabilities, rather than a totally new iPhone 5 design.

The official confirmation seems to support an earlier report alleging that the two companies were working on such a deal, further corroborated by the image of Tim Cook visiting China Mobile’s headquarters in June. Guardian suggested that Apple’s carrier partners are receiving iPhone units for field-testing, which 9to5Mac reported back in June. As with all leaks and rumors coming these days, especially from Asia, indicating that Apple is prepping for a Fall launch of the next iPhone, you’re advised to take this report with healthy dose of skepticism. It would be nice, however, if Apple brings the next iPhone to China Mobile’s 600 million subscribers. Apple has hinted during the last earnings call that China is becoming the key growth driver for them, growing sixfold from $630 million in revenues in the second quarter of 2010 to $3.8 billion in the June quarter of this year, representing a 13.3 percent of Apple’s total business by revenue. Bucking the trend, Apple is set to open new stores in the country this year and is working with manufacturing partner Foxconn which will spend $1.6 billion on its own stores in China that will sell Apple products.

A report from Sohu.com via AllthingsD goes further saying a two tiered model could have a $70B-$200B upside:

China Telecom will offer two types of iPhone that include the iPhone 5 and a ‘simplified iPhone 4,’” says White. “Essentially, this potential ‘simplified iPhone 4′ would be a more economical version of iPhone to target a broader customer base in developing countries such as China, allowing for an expanded market opportunity.”

When asked during the last earnings call by a Wall Street analyst about the prospect of the long-awaited China Mobile deal and pre-paid iPhones, Apple’s op-chief Tim Cook provided this telling expose:

Pre-paid or unlocked phones (phones without contract) are very key in China. And very key in a number of emerging markets where credit systems are not as well established as in Western Europe, USA, Japan, etc. The iPhone volume for the first 3 quarters of the fiscal year was up 5X year over year. We are not saying at all how to play perfectly in the environment. We have more to do and more to learn. We feel very good about our progress. We are taking those learnings and applying them to other markets as well.

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