This paper studies the optimal and fair service allocation for a variety of mobile applications (single or group and collaborative mobile applications) in mobile cloud computing. We exploit the observation that using tiered clouds, i.e. clouds at multiple levels (local and public) can increase the performance and scalability of mobile applications. We proposed a novel framework to model mobile applications as a location-time workflows (LTW) of tasks; here users mobility patterns are translated to mobile service usage patterns. We show that an optimal mapping of LTWs to tiered cloud resources considering multiple QoS goals such application delay, device power consumption and user cost/price is an NP-hard problem for both single and group-based applications. We propose an efficient heuristic algorithm called MuSIC that is able to perform well (73% of optimal, 30% better than simple strategies), and scale well to a large number of users while ensuring high mobile application QoS. We evaluate MuSIC and the 2-tier mobile cloud approach via implementation (on real world clouds) and extensive simulations using rich mobile applications like intensive signal processing, video streaming and multimedia file sharing applications. Our experimental and simulation results indicate that MuSIC supports scalable operation (100+ concurrent users executing complex workflows) while improving QoS. We observe about 25% lower delays and power (under fixed price constraints) and about 35% decrease in price (considering fixed delay) in comparison to only using the public cloud. Our studies also show that MuSIC performs quite well under different mobility patterns, e.g. random waypoint and Manhattan models.