Gear Live is reporting that Flash for the iPhone is coming. Given how many times rumors like this come around, I’m slightly skeptical until I actually see confirmation for myself.
That said, if there is an implementation, I suspect it will be a special mobile version, and very MPEG-4 centric. By that I mean H.264 as the encouraged (if not only) video encoding, and AAC as the preferred audio format, with MP3.
There’s a simple reason for this. AAC, MP3, and H.264 can be processed using hardware decoding. This means the CPU isn’t needed, resulting in lower power consumption. Many mobile devices have specific hardware for this reason. There is unknown hardware in the iPhone, which may very well be for hardware decoding.
By leveraging hardware decoding it allows Apple to offer things like video without sacrificing thermals or battery life. Since Flash can now use H.264 as well, it could offload some of that complicated processing. The CPU itself contains PowerVR MBX 3D graphics.
This could allow for most Flash to work, with much lower power consumption. The downside to this is that VP6 encoded video wouldn’t be able to use hardware decoding. For many online video sites (which use VP6 since H.264 is still very new) you’d have to run off of the CPU meaning more thermals and power consumption. A notable exception is YouTube, which thanks to Google’s work with the Apple apparently uses H.264 by means of a custom application.