Flash producer Adobe has joined forces with mobile ad network Greystripe in a move that will allow Flash-based ads to be converted into the iPhone-friendly HTML5 format.

By partnering with Greystripe, Adobe will be able to make use of its iFlash software to compete directly with Apple's iAd software.

Both formats will aim to deliver rich media elements that can run on the iPhone and iPad, including animation and video, as well as touch interaction without requiring users to leave the application they're in.

There are reports that Adobe may package iFlash in the latest version of its Creative Suite of content design tools in place of its own Flash workaround feature.

"By working with Greystripe, a leading provider of Flash authored advertising for mobile devices, we enable agencies to benefit from the power of the Flash platform while also targeting devices with HTML5," said Ricky Liversidge, vice president, product marketing for Flash Platform at Adobe.

The iFlash format would be "priced at a fraction of the cost" of Apple's own iAd version, said Adobe.

Steve Jobs effectively banned developers from using Adobe's Flash in an open letter titled "Thoughts on Flash". There has been an escalating war of words between the two companies ever since, with no sign of a truce.

Among certain criticisms aimed at Adobe were the fact that Flash is a "closed system" and that it "had one of the worst security records in 2009", according to Symantec.

Adobe co-founders Chuck Geschke and John Warnock responded in an online letter last month saying: "No company -- no matter how big or how creative -- should dictate what you can create, how you create it, or what you can experience on the web."

The latest statement about the joint venture from Adobe comes at a curious time as Apple prepares to unveil its latest edition of the iPhone. However, it is unlikely that Adobe's announcement will overshadow the unveiling of one of Apple's flagship products, later today.