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John Mylant over at Seeking Alpha caught my attention with this thought-provoking post examining Apple’s prospects in the mobile market. Mylant rightly claims that Apple’s two biggest challenge in the world’s largest mobile market will be in securing a deal with China Mobile and in the launch of the iPhone 5, which is expected to come to market in China by the end of the year.

There is no question that China has enormous potential for Apple (as well as just about every other international player in mobile), as I wrote earlier this year. The country’s mobile penetration rate stands at just 73 percent, which is a far cry from the 100 percent penetration we’re approaching in the U.S. And the penetration rate of 3G remains below 20 percent, which means the vast majority of mobile users in China tolerate agonizingly slow cellular speeds.

But Apple must overcome plenty of other hurdles to conquer China. Notching a deal with China Mobile (the nation’s largest carrier) would be a huge score, but the iPhone claimed a measly 7.4 percent share of the country’s smartphone market in the first half of 2012, despite being offered by both China Telecom and China Unicom. Apple’s handsets are simply too expensive for many consumers in that emerging market, where used handsets and copycat gadgets are commonplace. The smartphone market is also much more competitive today, which means the iPhones can’t enjoy the head start it built in many markets around the world. And it appears that Apple’s brand simply doesn’t appear to carry much weight in China as it does in Western Europe and North America.

The sheer size of the market in China all but ensures Apple will do very well there, particularly among the most affluent consumers. But I think there are far too many challenges for it to ever establish the kind of dominance there that it sees elsewhere.