Google is also set to launch its own store, called Android Market, to allow developers to sell applications designed for mobiles running its Android smartphone software.
Android Market will allow developers to set their own price for their apps and will be launched next week.
Apple's app store has been a major hit with users, carrying more than 10,000 programs for Apple's iPhone and iPod Touch handsets.
News of the Microsoft app store follows plans of a new version of its mobile phone operating system, called Windows Phone, which will be unveiled by Microsoft's chief executive Steve Ballmer in Barcelona today. It will include new "touch" features to rival Apple's iPhone.
According to reports Windows Marketplace, which has almost 20,000 applications already developed for its Windows Mobile operating system, will be launched towards the end of the year, leaving Microsoft lagging behind its rival.
Microsoft and Google won't be alone competing with Apple; Research in Motion, which makes the Blackberry, is also expected to launch a store of its own, as are various mobile phone handset manufacturers including Samsung and Nokia.