We’ve already heard in the past that Adobe is indeed working on Flash for the iPhone, but it seems that it’s a collaborative effort between Adobe and Apple as opposed to the former going at it on their own.
Adobe chief Shantanu Narayen made this revelation in an interview with Bloomberg at the Davos, Switzerland event. While no specific details were given as to the parameters of their teamwork, it was mentioned that Flash Lite will not be an acceptable alternative as it’s too feature-limited as opposed to the real thing. However, Flash itself is resource-heavy which is too much for the small processor of the iPhone or any smartphone for that matter to handle which is the real challenge in making the much-awaited feature finally available on Apple’s mobile phone.
As to whether it will be offered as a 3rd party app or plug-in, the chances of that happening is near impossible as the iPhone SDK’s guideleines strictly prohibits 3rd party app from serving as plug-ins. It’ll most likely debut as part of a firmware update, but as to when this will all happen, we’re as clueless as you are.