The developer license for iPhone 4 SDK now includes prohibitions on developing iPhone apps in other languages or in other development environments that are then translated or cross-compiled into native iPhone apps.
This change will stop developers from coding with Flash, Java or C#/.NET and then just cross-compiling them into iPhone apps using a “translation or compatibility layer.”
Restrictive Apple policies are likely to lead to further increase in developer interest in the open & free Android platform from Google. Android is anyway seeing lots of interest & action from mobile application developers and has also become popular among end users in a short time.
So if the actual iPhone device sees a drop in popularity amongst end users, it is likely that developers will be quick to drop iPhone development and choose to develop for other platforms that have easier & more open policies.