The deal comes a month before China's Lunar New Year holiday in late January, a big gift-buying season. That "will provide an immediate boost to Apple's share in China," said analyst Nicole Peng of Canalys, a research firm.
Forecasts of possible increased iPhone sales under a deal with China Mobile vary widely, from 10 million to 40 million. A key issue is whether it leads to additional sales or only prompts existing users to switch to China Mobile.
The iPhone will help China Mobile promote a new fourth-generation network that received government approval this month. But analysts say Apple needed the agreement more than the Chinese carrier. That gave China Mobile leverage in negotiations over how to split costs, which for the high-priced iPhone usually includes subsidizing handset sales.
The iPhone faces tough competition from cheaper smartphones running Google's Android software. Collectively, Android phones far outsell Apple's iPhone.
Apple CEO Tim Cook told the official Xinhua News Agency in January that he expects China to surpass the United States as its biggest market. About 50 million iPhones have been sold in China in the past 2 1/2 years, according to analyst estimates.