Apple`s long-awaited deal to sell the iPhone through China Mobile - the world`s largest mobile carrier - is set to up the ante in the smartphone war with rival Samsung , which stands to lose its leading position in the mainland market."I think Samsung would be the biggest loser of the deal. There`s no question Samsung will lose market share. Apple will take a large share of consumers who are willing to consider non-Chinese brands away from Samsung," Bob O`Donnell, founder and chief analyst, Technalysis told CNBC on Monday.
After months of anticipation, Apple announced late-Sunday that China Mobile will start offering the iPhone on its network of 760 million customers beginning January 17. It will begin taking pre-orders from December 25.
The Chinese telco is one of the world`s last major carriers that does not offer the iPhone, and its distribution of the device is seen as critical for growing Apple`s foothold in the mainland.
The country`s number two and three carriers, China Unicom and China Telecom have agreements with Apple, but they are far smaller than China Mobile.
"Apple iPhone 5s at all three carriers will for sure ignite a `price war` boosting the overall iPhone 5s sales in China," said Tom Kang, research director at Counterpoint, adding that Apple and Samsung may be tied in terms of smartphone market share by January or February - a peak shopping period in the mainland due to the Chinese New Year holidays, which begin at the end of January.
In October, Apple`s share in China`s smartphone market stood at 12 percent, compared with 17 percent for Samsung, according to Counterpoint.
In addition, Apple is expected to launch the iPhone 6 featuring a larger screen size - a segment of the smartphone market that has been dominated by Samsung - next year, which will also give it a boost in China, say analysts.
"There`s high demand for large screen phones in China. Samsung will have to counter Apple head on with a premium product, or trickle down to lower price points of around $200 to make up for that loss," said Kang.
Apple is forecast to sell between 15-25 million iPhones through China Mobile`s channels in 2014, according to analyst forecasts. Approximately 34 million units have been sold in China during 2013, Counterpoint estimates.
Rob Enderle, principal analyst at Enderle Group said while the deal will likely boost Apple`s share price, it may have a minimal impact on the company`s revenue.
"I`m not expecting it to boost Apple`s top line much unless they reduce prices more and if they do that it could hurt margins badly as it increases top line growth. A drop in margins could have an adverse impact on Apple`s stock price offsetting sharply top line growth benefits," said Enderle.
China Mobile`s shares reacted positively to the announcement, rising over 1 percent in early trade.
-By CNBC`s Ansuya Harjani; Follow her on Twitter: @Ansuya_H
Copyright 2011 cnbc.com