we've heard before) that would let users enjoy their Watch Instantly queues from the comfort of the small screen -- likely restricted to WiFi, of course, because the mere thought of trying to stream a movie over a saturated 3G network is about as brutal as fingernails on a chalkboard. It's a cute rumor; the overlap in Netflix and iPhone owner demographics has to number in the hundreds of thousands, so it's easy to understand why the thought of catching up on Friday Night Lights on the road would go over well with the populace.
A couple problems here, though: first off, Watch Instantly doesn't store content locally, which means you've got to maintain an internet connection to enjoy the show. Assuming the no-3G thing panned out -- and rest assured, it would -- who wants to be stuck in a coffee shop for hours on end because you want to finish out a movie you've started? Secondly, if there's one thing Apple loves, it's maintaining control of the media ecosystem; we'll see hell freeze over before we'll see Watch Instantly on Apple TV, so why would the iPhone be any different? Of course, there's nothing stopping Netflix from creating a Watch Instantly app, but getting it into the App Store is another matter altogether -- and barring some wild FCC ruling, we're not seeing Apple letting that happen.