China Unicom will announce a deal to sell Apple's iPhone in China as soon as Friday, an analyst said, citing an industry source with direct knowledge of the situation.

The analyst requested anonymity due to the sensitivity of the issue.

Such a deal would mark a huge step for Apple, giving it access to the world's largest mobile market with nearly 700 million subscribers. About two-thirds of those belong to industry giant China Mobile, with the rest split between Unicom and smaller rival China Telecom.

A China Unicom spokeswoman said the iPhone would undoubtedly be discussed on Friday when the company is set to hold a media briefing to discuss its results for the first half of 2009, but she did not say whether an agreement would be announced.

An Apple spokeswoman was not immediately available for comment.

Apple's iPhone manufacturing partner Hon Hai is making the iconic handset for a Chinese company, an official at the Taiwanese firm said, declining to be named as he was not authorized to speak to the media.

China Unicom, the country's second-biggest wireless carrier and the only one that runs a 3G network based on the WCDMA technology used in the iPhone, is expected to take market share from China Mobile in coming years.

Rumors have been circulating for months that Unicom and Apple would sell iPhones in China. One point of contention was reportedly the revenue sharing model adopted by Apple, which Unicom opposed, according to media reports.

China's three carriers will spend $58.5 billion through 2011 building out their 3G networks, which will offer more sophisticated mobile services, drawing foreign players to the world's biggest mobile market.

The world's No.2 PC maker Dell Inc said earlier this month it was developing mobile products for China Mobile's network.

(Reporting by Michael Wei, Kirby Chien and Kelvin Soh; Editing by Chris Lewis)

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