Maybe PaperShip? I don't know if it also is on iPhone, but works with iPad. Similarly, there is the Zotpad app. A third alternative, which I have found to be the best solution on Android, is the official zotero.org web interface / online library.

Zotero is currently very weak when it comes to multiple platform integration. Hopefully this will change in the near future, after the new bug update on the desktop is released. Mobile is a must for an application that manages literature, since it is so much easier to pull up a text whenever you have the time or need to read. Just having the option to search, read text in my favorite PDF reader and finally sync the change back (e.g. Annotations) is enough for me. Having this basic feature should be at the core of a mobile app.

I agree that there are some issues with PaperShip. However, I haven't had problems setting it up, and have it sync papers. Instead, it has started to make very weird highlight annotations that lay sorta in between the text lines. Makes it useless to be annotations. I've started to use Zotpad and GoodReader. Sync ZotPad->find text to read->send to/open in GoodReader->send/open in ZotPad to sync changes back to the server (don't flatten the pdf if you want to edit your annotations later).

I agree. Some sort of collective effort to raise money for app development would be great - kickstarter perhaps? I would happily help out with the interactive aspects of the app design.
I think this would raise some money. I feel like a lot of people use Zotero, and that they mostly use it over Menedely because of it being Free and Open software that doesn't rely on a third party comp.