I've been following Flash Lite for a couple of years now - it's good, easy to develop for and provides a really nice user experience. I doubt Flash is going to beat J2ME midlets out of the market like it did applets as the Flash Lite sandbox is even smaller than J2ME. There's currently no support for Bluetooth, camera or microphone functions, or any advanced interaction with the device hardware.
You also have the same problem with screen sizes in having to deliver tweaked versions of your app for every device variant. Scaling works in theory, but different aspect ratios and larger variants (ie: 320 x 240 vs 160 x 160) make it very difficult to reuse the same layouts. In many ways XHTML + CSS + AJAX style apps (such as Opera Platform) are much better suited to flexible layouts for various screen sizes to deliver a similar (asynchrous) experience.
It's also somewhat interesting to note that Flash Lite supports SVG-T (not sure which version of the spec) in the runtime, so it also directly competes with the likes of BitFlash and Ikivo.
The big question in my head regarding Flash Lite is has Adobe been able to make the deals with the OEMs and carriers required to begin to make Flash ubiquitous in the mobile space? I can't see OEMs eager to sign up to yet another perpetual licensing of a technology runtime, and without content or consumer demand I doubt it's something they will continue to pay for.
FWIW - Bruce Chizen did mention that Adobe was considering removing the licensing fee in the future, so this may change.
"Chizen: Time will tell what approach we
take. Macromedia has been able to charge for Flash Lite for mobile
devices, as well as Flash running on consumer electronic devices.
Adobe's strategy, with some exceptions, has been to not charge for the
Even though I like the revenue, I suspect over time you will
probably see us back away a bit from charging for the client and look
to make our money through servers, desktop software, advertising
revenue models, and so on. But not charging for the actual client.
Clearly today there is so much value in what we are offering that
the customer is willing to pay. So, I'm not willing to walk away from
that. But if I have to make a trade-off between ubiquity
and revenue -- as it relates to the mobile client business -- I'll go
for ubiquity. Because if I have my client everywhere, then I can make
money doing other things, as we have proven with the Adobe Reader."
In Canada, I believe we have one Sony Ericsson model (w600) shipping with Flash Lite (v1.1). One. Mind you, we're also a country stuck with 2 out of 3 carriers using CDMA networks... ;-)
Are significant numbers of devices shipping with Flash Lite pre-installed in other regions (outside of Japan) yet?