Although I haven't seen any Objective C MySQL PASSWORD() implementations, you might want to consider an alternate mechanism. For example, if you are attempting to obscure the password you could do something like an XOR on it with a prior known or computed value. Not high security but protects it somewhat in transit. A better approach may be to use a symmetric key encryption algorithm and encrypt it on client side (iPhone) and decrypt it on server side. You can use standard ones like 3DES, AES, Blowfish, and so forth for this. Again a shared secret must be defined, but then the server would be able to call PASSWORD() on the decrypted value in order to get the hash for validation.
Using HTTPS would also be a good consideration, no matter what solution you are using.