One of the largest independent developers for the Apple iPhone has written an open letter to Steve Jobs complaining that the App Store is harming larger development projects.

Iconfactory chief Craig Hockenberry, whose firm produces Frenzic and Twitterrific, complains that the majority of applications on sale at the App Store are either free or priced at 99 cents.

Such applications are typically given high prominence in the store and this is leading to problems for developers who want to build more complicated applications that have a higher price tag and as such less visibility.

“We have a lot of great ideas for iPhone applications. Unfortunately, we’re not working on the cooler (and more complex) ideas. Instead, we’re working on 99¢ titles that have a limited lifespan and broad appeal,” he writes.

“Raising your price to help cover these costs makes it hard to get to the top of the charts. (You’re competing against a lot of other titles in the lower price tier.) You also have to come to terms with the fact that you’re only going to be featured for a short time, so you have to make the bulk of your revenue during this period.

“This is why we’re going for simple and cheap instead of complex and expensive. Not our preferred choice, but the one that’s fiscally responsible.”

He points out that if Apple wants serious applications such as spreadsheets and web design tools a rethink is needed in either the pricing structure or the way that applications are featured in the App Store.

The situation is only going to get worse, not better, he warns. With tens of thousands of applications it is already a “fricken’ cat fight” to get into one of the top 100 spots and as numbers of new programs rise then the problem will only increase.