You need to create infrastructure (Access Point mode) wireless hot-spot rather Ad-hoc hot-spot.
In linux(ubuntu) i used ap-hotspot and which works for me(i got connected WP8 and Android 4.4, dont know about iPhones).
For installation
sudo add-apt-repository ppa:nilarimogard/webupd8
sudo apt-get update
sudo apt-get install ap-hotspot
Update for 14.04
The hostapd version in Ubuntu 14.04 is buggy and doesn't work properly. To get AP-Hotspot to work with hostapd in Ubuntu 14.04, you need to downgrade hostapd and use apt to hold the package so it's not upgraded.
To do this, use the following commands:
For 32 Bit:
cd /tmp
wget http://old-releases.ubuntu.com/ubuntu/pool/universe/w/wpa/hostapd_1.0-3ubuntu2.1_i386.deb
sudo dpkg -i hostapd*.deb
sudo apt-mark hold hostapd
For 64 Bit
cd /tmp
wget http://old-releases.ubuntu.com/ubuntu/pool/universe/w/wpa/hostapd_1.0-3ubuntu2.1_amd64.deb
sudo dpkg -i hostapd*.deb
sudo apt-mark hold hostapd
Configuration
sudo ap-hotspot configure
It will asks for interfaces, Access point name(which can be anything you want to see as wifi_hotspot name), password(which is your wifi_hotspot security key).
Now, if you able to configure successfully and dont get any kind of Unsupported wifi errors(if you get that simply means, your wifi_card doesnt support infrastrucutre Access point wifi_hotspot, so can do nothing on it), then procceed.
So just now start your hotspot as
sudo ap-hotspot start
If you want to stop then
sudo ap-hotspot stop
If you wanna see all available commands
sudo ap-hotspot
You don't see this hot-spot running in any indicator or something, i am still finding it how to determine status checking of it.
I am using is from last few weeks, and no bugs(no side-effects too) yet. I am using Gnome-Ubuntu 13.10 amd64 sharing eth0 to my WP8.
SOURCE : http://www.unixmen.com/create-infrastructure-wifi-access-point-connect-android-devices/
SOURCE : http://www.webupd8.org/2013/06/how-to-set-up-wireless-hotspot-access.html
Best Answer
It is possible.
I only know the method with hostapd to create an AP.
And to use hostapd with rtl8188, you need to use a patched version of hostapd. There are several version floating around. Look for rtl8188 and raspbian and hostapd in your favorite search engine.
For example here or here
But extra step is needed to make the bridge to share internet connection.
To ease things, I recommend to use create_ap that will do it in one step. See https://github.com/oblique/create_ap