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With the launch of Yahoo! Blueprint 1.1, it has never been easier to build rich, compelling mobile services in record time. Blueprint 1.1 allows you to use simple XML to create applications, sites and widgets that run on thousands of mobile devices. When you use Blueprint, you are using the same technology that we use to build our world-class mobile offerings such as oneSearch, oneConnect and the yahoo.com mobile homepage for your own mobile services
Yes and no.. The framework supports iPhone and many other devices for web-browser based sites/applications...
However, it's not for developing native apps for iPhone or any other platform, but to simplify the process of deploying web apps across many different mobile devices using the Blueprint XML markup language.
The main limitation as I see it (other than the fact that it is a web app and you lose all native capabilities, such as iPhone accelerometer etc.) is that you need to send all data through Yahoo servers for formatting, which is less than ideal for e-commerce and sites under strict compliance and privacy regulations.
On the up side, you can develop a single code base for mobile and have it work across many devices..