Reports revealed today are showing that seven million iPhone and iPod Touch users attempted to download Adobe Flash to their iPhone/iPod back in December. This is an increase of 4 million from the 3 million who attempted the same in June last year.
Although not available in the app store, the flash application can be downloaded direct from Adobe, although due to restrictions on the iPhone there is no version that actually works on the devices. It is likely that the 7 million attempts to download flash were from users browsing websites and being presented with a prompt to download flash.
Adobe says this clearly shows that iPhone and iPod Touch users want Flash, despite Apple's decision not to support it.
Adobe is currently working on getting Flash 10.1 on to phones which includes the Palm Pre, DROID, and Nexus One with in the next few months. The creators of webOS and Android (by Google [GOOG]) do allow flash on their devices, but Apple will not budge on their stance.
It is currently unknown why Apple [AAPL] are rejecting the application although speculation revolves around developers creating good enough applications that would work in the browser and lower the chances of users using the app store, thus lowering Apple's revenues. Other rumours indicate that Apple could be holding off and waiting for HTML5 where similar effects to flash can be created within the HTML5 framework (without the need of Adobe Flash).
At the moment, there aren't many mobile devices that run Flash, so Apple doesn't really have that much competition. However, give it a few more months when smartphones start getting flash and Apple's stance "might" change.
It's a shame they wont open up the device, but so far it seems they haven't really lost out on sales so they at least are getting everything else right.