Nov 21, 2012 · 3 minutes

Today, the world was introduced to Jolla's Sailfish, a new mobile operating system that will serve as an open-source alternative to Android and iOS. But Jolla's biggest target is larger than Google and Apple combined. It's China.

At the launch of Sailfish at the Slush conference in Helsinki, Finland, the startup's founders made clear that China was priority number one. The US didn't even get a mention.

The Helsinki-based Jolla, made up of a team of ex-Nokia engineers that had been working on the MeeGo OS before the manufacturer decided to partner instead with Windows Phone, announced that it already has a channel partnership with D-Phone, one of China's largest electronics retail chains, for distribution of the Sailfish-based devices. Although it went unmentioned, however, one slide in Jolla's presentation today hinted that a bigger announcement might be on the horizon – one that involves Tencent, China's largest Internet company.

Tencent was among a handful of early partners listed on one of Jolla's slides towards the end of its presentation today. Asked after the presentation about the nature of Jolla's relationship with Tencent, co-founder Stefano Mosconi said it was "friendly." Pushed for specifics, he declined to elaborate.

One should be careful about drawing inferences from the mere appearance of a logo on a company slideshow, but that doesn't make the Tencent partnership any less curious. What, you might ask, would Tencent find so interesting about Jolla?

Well, there have long been rumors that Tencent will come out with its own phone, just as Alibaba, Baidu, and Qihoo have done. Most of its competitors have turned to Android for their operating systems, but that leaves them beholden to Google's terms of compatibility – an issue Alibaba has struggled with – not to mention have to work with closely with what is effectively a rival. In Jolla, it might just be that they've found a viable alternative.

Jolla's executives have been scoping out the Chinese market for the past year, building partnerships and studying how people use their phones there.

"It's a very dynamic market," said co-founder and CEO Marc Dillon in an interview after the Slush presentation. "Chinese consumers are getting to the point now where they are buying their second and third devices. They've been saving money and they want to buy something that's bigger and better."

China's smartphone market is certainly dynamic. Apple has a foothold, especially with the more well-heeled citizens, but it lags behind the dominant Android, which comes installed on multiple devices, most of which are far cheaper than the iPhone. Homegrown iPhone competitor Xiaomi is using a customized version of Android on its phones, and ecommerce giant Alibaba has its own OS, Aliyun (although Google has claimed that it is merely a forked version of Android).

Where China is most "dynamic," however, is in the numbers. China is already the largest smartphone market in the world, and it's growing fast. Within just a year, it will be twice the size of the US smartphone market. Customers can buy decent Android phones for just $100, or get high-spec devices for as little as $200. Last year, there were just 50 million smartphones. This year, there are 250 million, and by the end of 2013, that number is expected to hit 500 million.

Without a major partnership with the likes of Tencent – which claims 700 million users of QQ, its desktop instant messaging service, and has 200 million users of its WeChat mobile messaging app – Jolla can't seriously hope for anything more than just a slender slice of that market. But even that in China could make it worth its while. After all, a fraction of 500 million is still a lot of millions.