Apple said the partnership with China Telecom is based on improving the reliability of its iCloud storage service, which is used to back up data on all of its devices including iPhones and iPad.

The new arrangement reflects another reality of the post-Snowden era. Apple said Friday in a statement to the WSJ that all data stored is encrypted, meaning China Telecom won't have access to its content.

A new Reuters report adds that "Apple has said it has devised encryption systems for services such as iMessage that even Apple itself cannot unlock. But some experts expressed scepticism that Apple would be able to withhold user data in the event of a government request."

Reuters quotes Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, internet and consumers who stated that "If they're making out that the data is protected and secure that's a little disingenuous because if they want to operate a business here, that'd have to comply with demands from the authorities."

Apple has frequently come under fire from Chinese state media, which accused the company of providing user data to U.S. intelligence agencies and have called for "severe punishment." Apple has since refuted the claims set out in the CCTV report.

Yet in a post-Snowden world, Apple saw the writing on the wall and has decided to avert a clash with the Chinese government by setting up their new servers in China. In 2013 NSA leaks were blamed for Cisco's falling sales overseas and in China in particular.

In the end, as Goldkorn noted, "China doesn't want any digital service offered to Chinese people to be hosted offshore. I suppose it was inevitable that Apple had to comply if they were using foreign servers for Chinese user data." With Apple's recent move in China coming to light today, one has to wonder if Russia is next.

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