China Sales Could Boost Apple (AAPL) EPS by $10 in FY12 - Analyst

Morgan Stanley is getting bullish on Apple's prospects in China, seeing strong sales for the iPhone in 2012 as partnerships expand in the country.

According to the firm, Apple's (Nasdaq: AAPL) efforts with China Telecom (NYSE: CHL) and China Mobile (NYSE: CHL) will lead to potential sales of 40 million iPhone units in China for 2012.

Currently, Apple's deal with China Unicom (NYSE: CHU) allows access to just 10 percent of the 150 million "high-end" mobile subs in China. The addition of the other two carriers could bring iPhone sales in China to 26 million incremental units for 2012, adding at least $10 to earnings per share.

Apple could sell up to 24 million handsets on China Mobile's network alone, said the Morgan Stanley analyst, assuming a 20 percent penetration rate. With the acceleration of smartphone sales, that number could jump to 36 million in 2013.

The Street is modeling for earnings of $41.72 per share for Apple in fiscal 2012. That number compared with earnings of $27.68 per share reported for 2011.

Apple shares are indicated for a lower open Monday.

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