Apple finally signed a deal to distribute iPhones through China Mobile over the weekend, which has led many analysts to start slavering convulsively because money will happen now.

China Mobile is the world's largest carrier with 760 million subscribers. Analysts are estimating Apple will only sell 15-20 million devices (second reference) there this year. China's a largely unsubsidized market, iPhones are expensive there, and the really huge growth is in $100-300 Android phones.

That's probably part of why the Chinese government finally let China Mobile sign this deal. (China Mobile is government-owned.) For the past 20 years, the Chinese government has made sure to protect local technology firms by handicapping foreign entrants in various ways. This could be as simple as slowing down connections to foreign servers, or as blunt as barring foreign firms from operating in China.

The result has been terrific for the domestic Chinese technology industry, where local firms like Baidu, Sina, QQ, Alibaba, Meizu and Xiaomi have been able to grow without much threat from global competitors. It hasn't been so great for companies like Google, Facebook and Twitter, which can't mobilize the potentially huge Chinese market.

(Let's note that access to the China market doesn't mean automatic success. Microsoft has been selling Windows Phone in China for years, but its market share is actually slipping, according to Kantar Worldpanel.)

Apple's one of those big international bruisers, so this China Mobile deal shows that the government has figured out how Apple can be part of the market without dominating it. That'll be fine for Apple; with its huge profit margin and China's huge population, the company only needs to skim off the top of the Chinese market to succeed. The real loser here, of course, is Google. 

Does Google Need China?

Android does spectacularly in China, but Google gets little back from that. The fastest growing mobile OS in China is the non-Googleized AOSP (Android Open Source Platform), which is Android with all the Google services stripped out of it. Only 5.6% of Android users in China download apps from the Google Play store, according to analyst Benedict Evans.

Google doesn't seem to have any traction in China; the company's whole story over there has been about retrenching and retreating. Ultimately, that's probably because while Apple and Microsoft are basically product companies, Google is an information service. The Chinese government takes a much narrower view of "information services" than it does of OS and hardware companies with a sideline in information services, especially if those companies pledge to cooperate with "local laws."

Apple's Chinese triumph won't have a direct effect on North Americans, except that it changes the balance of power between Apple and Google worldwide. So much of the Android-Apple-Windows Phone battle is about perceived momentum and perceived market size. Apple and Microsoft have both been able to crack China with a full set of services. While Google's AdMob unit seems to be doing well, according to Bloomberg, the company as a whole is still at a disadvantage.

Amazon is succeeding with non-Google Android in the U.S. Nokia is looking at it for featurephones in developing markets. It's the fastest-growing OS in China. The question now is whether Google's inability to bring its full set of services to China's consumers will damage its overall prospects.