Apple Inc.'s (NASDAQ: AAPL) iPhone has been selling like gangbusters in the U.S. since its debut in June 2007, but that kind of fever -- and the fever U.S. consumers felt at every iPhone launch in the U.S. -- seemed tepid by comparison when China Unicom unleashed the iPhone for sale last week.

"China is the world's biggest market for telecom services," notes Geoffrey Seiler, in an in-depth review of the leading Chinese telecom and wireless phone companies.

In his BullMarket.com, he looks at "China Mobile (NYSE: CHL), China Unicom (NYSE: CHU), and China Telecom (NYSE: CHA) noting,"There is still a lot of wireless growth potential in the world's most populated country. As such, we would expect all three to continue to grow for the foreseeable future."

Seiler explains, "China Mobile is the undisputed king of mobile from a subscriber base standpoint. Through the end of June, the company boasted 493 million subscribers. The company boasts 70% of the Chinese market.

China Unicom (NYSE: CHU - option chain) stock is trading lower Monday even though the company announced Sunday night that it had reached a deal with Apple (NASDAQ: AAPL) to sell the iPhone in China. The news was not enough to carry CHU against the tide of falling Asian markets as an Apple spokeswomen confirmed that CHU will not be the exclusive carrier of the iPhone in China. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CHU.

This morning, CHU opened at $14.00. So far today the stock has hit a low of $13.85 and a high of $14.02. As of 11:30, CHU is trading at $13.99, down 44 cents (-3.0%). The chart for CHU looks bearish and S&P gives CHU a negative 2 STARS (out of 5) sell ranking.

U.S. stock markets are poised to rise today as more and more positive data convinces Wall Street that the economic recovery is for real.

Futures for the Dow Jones Industrial Average, the Nasdaq Composite Index and the S&P 500 Index were all indicated higher following a rally in overseas markets. Germany's Dax, France's CAC-40 and the U.K.'s FTSE 100 all posted strong gains. Japan's Nikkei 25 also rose while China's Hang Seng declined.

For those looking for silver linings, there are plenty to choose.

While Dell, Inc. (NASDAQ: DELL) finally entered the mobile phone market in China today with what could be considered a very disappointing product offering, competitor Apple, Inc. (NASDAQ: AAPL) may be blazing into China as well with its China Unicom partnership for the iPhone.

"China Unicom (NYSE: CHU) could be one of the best ways to play China's astounding economic growth," says Brandon Clay in Invest with an Edge. Here's the growth advisor's review.

"With the world's largest population as its market, the mobile phone industry in China is set to soar. This makes China Unicom a compelling play. The firm has 21% market share in China.

"China Unicom's vice president recently said the company is targeting subscriber growth of 20 million to 30 million within a year. To put that into context, Verizon Wireless, the largest mobile phone carrier in the U.S., had 72.1 million subscribers at the end of last year.

This post is part of a 12-article feature on the best bets for investing in China. To see all the other recommendations in this special report, click here.

"Holding both of China's largest wireless carriers -- China Mobile (NYSE: CHL) and China Unicom (NYSE: CHU) gives investors something of a hedge in the event that one company takes a large amount of business from the other," says China expert Jim Trippon.

In his The China Stock Alert, he adds, "Although this is a safety measure for investors, we don't expect massive erosion in either company's subscriber base as the telecom sector and 3G service continue to expand in China.

Those surprised by the market's strength in recent weeks should be even more impressed with the rebound in China, where both their market and economy have proven among the most resilient in the world.

Global specialist Nicholas Vardy adds, "While the US markets are rising, Asian stocks are on fire." ETF expert Paul Tracy adds, "China funds have screamed to the top of the performance charts."

In large part, this strength is due to the country's stimulus program. Tracy points out, "To combat the sagging global economy, Chinese Premier Wen Jiabao orchestrated a massive 4 trillion yuan ($586 billion) stimulus package.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"China Unicom (Hong Kong) Ltd. (NYSE: CHU) is our top investment pick for 2009," says Jim Trippon, China expert and editor of The China Stock Digest.

The advisor explains, "China Unicom is involved in the cellular telephone business in 31 provinces, municipalities and autonomous regions in China. The company is also a major provider of data and Internet services in the People's Republic of China.

"We like the fact that this company is dependant on local Chinese customers and is fairly well insulated from the global economic downturn.

"We have selected China Unicom as our top pick for 2009 based on valuation. The China Stock Digest uses a Warren Buffet/Benjamin Graham style of stock picking.

Analyst upgrades:

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Deutsche Bank.
• Fortress (NYSE: FIG) was upgraded at Citigroup to Hold from Sell.
• Prudential (NYSE: PUK) was lifted to Overweight from Neutral at JP Morgan.
• Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
• UBS upgraded ASML Holding (NASDAQ: ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
• Oppenheimer raised Seattle Genetics (NASDAQ: SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.

Analyst downgrades:

• UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
• Royal Dutch Shell (NYSE: RDS.A) was downgraded to Underperform from Neutral at Credit Suisse.
  
• China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.

MAJOR PAPERS:

• Chip suppliers for cellphones including Qualcomm Incorporated (NASDAQ: QCOM), Texas Instruments Incorporated (NYSE: TXN) and Nvidia Corporation (NASDAQ: NVDA) are moving aggressively to make products for Intel Corporation's (NASDAQ: INTC) new breed of pocket-size portable devices, called MIDs, the Wall Street Journal reported.

OTHER PAPERS:

• According to the UK Times, Barclays Plc (NYSE: BCS) and The Royal Bank of Scotland Group Plc (NYSE: RBS) were raided by the Office of Fair Trading as part of the investigation into price fixing loans to professional services firms.

WEB SITES:

• Almost three dozen of the largest U.S. companies may have to slash their dividends, since the dividends greatly exceed their cash flow, Bloomberg reported. Large companies in this situation include General Motors Corporation (NYSE: GM), Motorola Inc (NYSE: MOT), and The New York Times Company (NYSE: NYT).
• China Telecom Corporation Limited (NYSE: CHA) may announce today that it has bought the mobile phone assets of China Unicom Limited (NYSE: CHU) and its parent company for more than $14.4B, Bloomberg reported, citing the South China Morning Post. China Unicom could say that it is merging with China Netcom Group Corporation (NYSE: CN) as early as today, the newspaper added.

As China continues its massive economic expansion, the country is in a continuous state of flux. According to the New York Times, China has requested its six telecommunication firms to consolidate their assets, effectively paving the way for fixed-line operators to get into the mobile arena.

According to the same Times article, "the parent of China Telecom will buy a mobile phone network from the parent of China Unicom (NYSE: CHU), which in turn will merge with the company that controls the China Netcom Group (NYSE: CN) ... China will issue three third-generation wireless licenses after the overhaul is completed."

The big short-term loser of this directive appears to be China Mobile (NYSE: CHL). The stock was down about 7% Monday off the news. The firm's stronghold on the mobile telecom market in China is now effectively weakened as China Telecom and Netcom can gear up to compete against China Mobile.

Why should this interest investors? Again, according to the Times, China had almost 600 million mobile phone users at the end of April, exceeding the combined populations of the United States and Japan. In the world's largest mobile market in terms of users, the $100 billion market is poised to ramp up given that just over half of all Chinese own mobile phones and a lot less than that have Internet connections.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com an d a former equity analyst for a leading multinational hedge fund.

In a reorganization of China's telecom industry, which will change the face of the wireless industry, the country plans to merge two of its largest mobile companies, China Netcom (NYSE: CN) and China Unicom (NYSE: CHU). The new firm will be issued on of the three high-speed wireless licenses that the government plans to grant.

China's two largest phone companies, China Mobile (NYSE: CHL) and China Telecom, will receive the other two contracts.

According to Reuters, the 3G development will "unleash billions of dollars in spending for network gearmakers." Those companies would include Nokia (NYSE: NOK), Nortel (NYSE: NT), Ericsson (NASDAQ: ERIC),and Motorola (NYSE: MOT).

The news may also be a benefit to handset makers as they rush to offer products for the new 3G networks. Apple (NASDAQ: AAPL) has still not found a home for the iPhone in China.

More competition among carriers will give it a greater chance to strike a good deal. A new market could also give some aid to Motorola's flagging handset sales and to rivals Samsung and Sony Ericsson.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: Fluor, Forward Air and McDermott were today's noteworthy upgrades:

• Citigroup upgraded shares of Fluor (NYSE: FLR) to Buy from Hold to reflect the company's strong performance and backlog in Q4 and raised their target to $190.50 from $158.
  
• Baird upgraded Forward Air (NASDAQ: FWRD) to Outperform from Neutral citing near-term growth initiatives that are gaining traction.
  
• Citigroup also upgraded shares of McDermott (NYSE: MDR) to Buy from Hold to reflect the company's strong Q4 performance and rising commodity prices.

OTHER UPGRADES:

• RBC Capital upgraded Digital Realty (NYSE: DLR) and ProLogis (NYSE: PLD) to Top Pick from Outperform.
  
• Credit Suisse raised China Unicom (NYSE: CHU) to Outperform from Neutral.
  
• Tyson Foods (NYSE: TSN) and Oracle (NASDAQ: ORCL) were upgraded to Buy from Neutral at Merrill Lynch.

MAJOR PAPERS:

• According to the Wall Street Journal's "Heard on the Street," bears believe it may be too early to bargain hunt among financial stocks, as they think there may be more bad news to come after Citigroup Incorporated (NYSE: C) announced it took an $18B write down in Q4.
• Analysts who follow China's telecom sector believe there are a few prime picks, including China Unicom Limited (NYSE: CHU) and China Mobile Limited (NYSE: CHL), but are advising investors to think long term, the Wall Street Journal reported.

OTHER PAPERS:

• Iron ore talks with China's Baosteel have come to a halt after the company and its peers said price demands from miners BHP Billiton Limited (NYSE: BHP), Rio Tinto PLC (NYSE: RTP) and Companhia Vale do Rio Doce (NYSE: RIO) were "far too high," the Australian Financial Review said.

WEB SITES:

• MiningMx.com reported that BHP Billiton has reached an "impasse" with South Africa's government over the conversion of the company's exploration leases to new order mining rights.