Is Steve Jobs lying about Flash not working on iPhone?

RUMOR ALERT — I have not substantiated this with anyone at either Adobe or Apple, so might turn out to be totally false:

Today I got a note from someone I know who works closely with Adobe and Apple. He saw my “Apple stabs Adobe in the Back” post and wanted to give me some details about what’s going on between Adobe and Apple. He says that he’s seen Flash running on an iPhone in a lab and that it’s been running for quite a while and that it’s not a technical issue that caused Steve Jobs to go public about not putting Adobe’s Flash on the iPhone. He wrote “Geez – my Chumby with half the CPU horsepower can run Flash8/AS2.”

So, what’s the reason, according to my source?

Adobe is playing hardball with Apple over their PDF renderer. “Adobe wants Apple to use the Adobe PDF renderer.” His thesis? Steve Jobs is playing hard to get to get Adobe to give up this demand.

Again, I have no idea if this is true or not. But tomorrow’s SDK announcement with Apple is going to be very interesting to listen to.