Apple puts legal knife into Adobe's CS5 - New iPhone Developer Agreement Bans the Use of Adobe’s Flash-to-iPhone Compile

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Seacrest wrote:
Just a minor point, but AFAIK, this doesn't put Flash on the iPhone, it compiles content created in the Flash IDE (or whatever it is) into native iPhone Apps.

That is my understanding as well. This is to let people who develop Flash apps, deploy to an iPhone or iPod Touch (or iPad) even if those devices don't support Flash.