This article discusses how Mobile Application Clusters can be developed through competitions for innovative applications. The Smart City services that are developed in competitions benefit both the Mobile Application Cluster and the citizens. The function of the competition mechanism to encourage the development of new mobile applications utilizing Open Data is described with examples from the Helsinki Region. Porter's model of determinants of national competitive advantage is used as a framework to describe the forces driving the ongoing developments towards the Mobile Application Cluster. In particular the paper explores the interaction between the cluster determinants of Porter's model with regard to the externalities made by the linkages between the parties in the emerging cluster. In the two competitions for Open Data applications that the paper discusses innovation is supported by a policy-like instrument: an urban competition on open data, which is driven forward through the Living Labs approach to innovation. The two competitions launched in the Helsinki Region are aimed at developing mobile applications by utilizing open data. The paper shows how a Living Lab functions as an innovation intermediary where the competitions are utilized in developing a Smart City.