Smule has introduced Ocarina, a app that transforms the iPhone into
an expressive musical wind instrument. It’s available now at the
Apple Apple Store
for US$0.99

The Ocarina synthesizes sound in real-time, just like a regular
instrument, based on actual gestures including wind input, tilt, and
finger placement over the four holes overlaid on the multi-touch
pad. The sound isn’t pre-compiled, but is generated by the notes,
gestures and nuance of the individual performer.