“Market Significantly Underestimates Apple’s C2012 Earnings Growth” reads the headline of Katy Huberty’s contribution to a 45-page Morgan Stanley report to clients Wednesday summarizing what the bank expects to be the big “investor debates” of 2012.

Her headline is an understatement, judging from the text of her note on Apple (AAPL). “Several data points,” she writes, “give us confidence that our Bull Case of 55% revenue and 62% EPS growth is likely in C2012.”

The market, by contrast, believes Apple’s growth rate is unsustainable; the Street’s consensus is that earnings growth will slow to from more than 70% in 2010 to 16% in 2012. “Indeed,” Huberty writes, “Morgan Stanley’s What’s in the Price analyzer suggests Apple’s stock price is pricing in –2% long term earnings growth.”

Huberty believes the key to Apple’s future growth — the elephant in the room that the market is missing — is China, where Apple is already the leading smartphone and PC brand and where intention-to-purchase, as measured by the bank’s AlphaWise survey, is 4.5 times the iPhone’s current market share. (See chart at right.)

Note, also, the dismal purchase intention numbers in China for many of Apple’s top competitors, including Nokia (NOK), Samsung, and Sony Ericsson (SNE).

Huberty, as usual, has offered three scenarios for Apple: A bear case (with a price target of $350), a base case ($450) and the aforementioned bull case ($600).