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That's not true, you can build apps for free. Codename One has a build server on the cloud, which simplifies the whole build env for the developer.(you can use a Win machine to develop for iPhone). The uses of this build machine has free account and paid accounts.

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Please consider adding a support of building locally, without your servers. E.g. when you're already on mac, with iOS SDK and Android SDK set up, you shouldn't need to use some online services.

Their FAQ (http://www.codenameone.com/faq.html) claims that it is possible, though a little complicated (and they'll only provide support if you're on their enterprise plan).

Actually you can purchase servers to run within the organization e.g. for banks and other orgs that can't use the cloud: http://www.codenameone.com/corporate-server.html

The architecture is pretty hairy so making this into a local install is just not practical.

Can I build applications for free from start to finish directly on my computer without any internet connection? yes or no?

Not officially. But you can look at this http://sjhannah.com/blog/?p=228

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