Flash playback is missing on iPhone - even though everybody thinks it should be there and it's not hard to do (I'm sure Adobe would be happy to license Flash player to Apple).

Is is just feature prioritization or another sign that Apple is working on Flash competitor?

But wait, you say, what do you mean "another"?

Well, the first sign is this job posting for iPhone Media Engineer.

The most important part is: "Join a new high powered team within IMG to develop a cross platform web browser plugin for interactive media."

Hmm, cross-platform web browser plugin for interactive media - if it's not a dictionary definition of Flash then I don't know what it.

It could be referring to QuickTime browser plugin, which already exists, but it's just video playback. "Interactive media" promises much more than that and the product isn't new.
Given ubiquity of Flash and Microsoft's offensive with Silverlight one can question a wisdom of developing an also-ran but Apple has something that neither Adobe nor Microsoft has: an iPhone, soon to be owned by 10 million people, and if Apple doesn't want Flash or Silverlight on the iPhone, they won't be there.