Apple has reportedly agreed to a deal with China Unicom that will bring the iPhone to China in October. China would be the biggest market yet for Apple. The deal is expected to be announced during China Unicom’s earnings call on Friday, when the carrier will report results for the first half of 2009.

According to a report from the Straits Times, China will get a stripped-down version of the iPhone 3G, and the Chinese version of the device will not have Wi-Fi. A high number of Wi-Fi hot spots in China was cited as the key reason for lack of Wi-Fi on the device.

Conflicting reports said the phone will be available with either a two-year contract or a mandatory purchase of prepaid minutes.

An iPhone in China comes as no surprise. Talks between China Unicom and Apple have been drawn out for months.

Smartphone competition in China appears to be picking up as of late. Dell recently confirmed that it has been in talks with China Mobile to develop a smartphone for that carrier’s network.