A survey of high-end Chinese buyers suggests the Street has underestimated demand

Photo: iPhonAsia.com

Morgan Stanley's Katy Huberty -- a long-time Apple (AAPL) bear who seems to have switched her drink to Kool-Aid -- issued an optimistic report Friday about the Chinese market for iPhones. It includes scenarios by which she sees Apple's share price hitting $325 to $435 within a year.

(The stock closed at $199.29 Thursday, down more than 4% for the day, and then fell another 3.36% on Friday.)

Central to Huberty's "Bull Case" is a scenario in which iPhone sales -- which got off to a famously disappointing start in China -- hit a cruising speed of 4-5 million units per year and then accelerate dramatically when and if Apple introduces a lower-cost phone with a pre-paid plan.

Her findings are not that different from those of other China watchers, but they are probably based on better data -- the results of a survey of 1,050 Chinese consumers representing what calls "the core iPhone addressable market in China."

Huberty's key findings:

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