China Mobile insiders have already poured cold water on speculation that the iPhone 5 will come to the world’s largest carrier this year, but hope has been revived after it was revealed that the baseband chip in Apple’s new smartphone does carry support for the TD-SCDMA standard that China Mobile uses.

The Wall Street Journal picked up on the detail from a teardown of the iPhone 5 by iFixit. Although Qualcomm announced TD-SCDMA support when it introduced the MDM9615 chip, Apple doesn’t list the protocol in the technical specifications of the new iPhone.

Investment bank HSBC said in a research note that the iPhone 5 would need some minor changes in order to operate on China Mobile’s 3G network. Apple already offers multiple models of the handset, and it will need to release more in order to fully support LTE networks around the world. The LTE bands currently supported by the GSM, CDMA and global GSM versions of the latest iPhone will not cover all of the countries set to launch this week.

 iPhone 5 baseband chip hints at launch on China Mobile, the worlds largest carrier

In fact, Apple has already faced a complicated mid-cycle iPhone model update, in the form of the Verizon iPhone 4, which came out early last year. If the iPhone maker managed to find it worthwhile to release a separate version for Verizon, China Mobile should be an even bigger draw, since its subscriber base is larger than most nations. The carrier had almost 700 million subscribers as of August, more than twice the entire population of the US.

Even without official support or 3G speeds, iPhone users on China Mobile already numbered more than 15 million strong as of March. Considering that China Mobile had 72 million 3G subscribers as of August, an iPhone deal could result in tens of millions of new sales for Apple.

The iPhone has helped second-place operator China Unicom gain on China Mobile, as the company had over 60 million 3G subscribers as of July and 63.7 million at the end of August (PDF), despite having only a fraction of China Mobile’s overall subscriber count. China Unicom’s combined 2G and 3G subscriber count for August equals 227 million.

Unicom has said it expects to get the iPhone 5 within the next three months, and China Telecom, the country’s only other carrier, believes it will get it soon after its rival.

Similar to the launch of the Verizon iPhone 4, the release of a China Mobile-ready iPhone 5 in the middle of Apple’s annual release cycle could also help offset some of the usual seasonal downturn in handset sales. As consumer’s have keyed in more closely to the expected release dates of upcoming iPhone releases, quarterly shipments have tended to taper off sharply ahead of new models. For instance, Apple sold 37 million iPhones in the fourth quarter of calendar 2011, which included the release of the iPhone 4S, but just 26 million handset sales in the June quarter.

While some may argue that Apple is not overly concerned with keeping up with Wall Street estimates, there’s no denying that a staggered launch on the world’s biggest carrier would be appealing to the company.

China Mobile is eager to get its hands on Apple’s handset. The operator reported disappointing earnings results last quarter, causing numerous analysts to conclude that the lack of the iPhone is to blame for sluggish growth. Earlier this year, the company revealed that it is in talks with Apple, and a top executive has claimed that problems with development of Qualcomm’s TD-SCDMA-compatible chips has been the biggest constraint.

Apple is pursuing its most aggressive iPhone rollout yet with its sixth generation, aiming to hit 100 countries and 240 carriers by the end of the year. Last year, the Chinese release of the iPhone came in the second quarter of sales and helped Apple have only a minor sequential drop in iPhone sales. This year, however, the iPhone 5 is slated to arrive in China during the first full quarter of iPhone sales

While it’s still anyone’s guess whether Apple will actually release a China Mobile iPhone in upcoming quarters, the company would definitely be leaving money on the table if it didn’t.

Image credits: AFP/Getty Images