As DreamerBrian said, I have no experience releasing a smartphone game. But I do have experience being a smartphone user, and I'm just an average consumer. So take my feedback with a grain of salt.
I'd suggest actually starting at $0.99.
Looking at the app store right now (on an iPhone, at least), out of the top 25 paid apps, only 3 of them are more than $0.99. Apps from independent parties are a dime a dozen, and as an average consumer, I wouldn't pay more than just the $0.99 for a game I've never heard of, from someone I've never heard of. There are just too many free games out there to spend more than that $0.99, unless it's something that has something behind it. World of Goo, for example, I had no problem dropping the $2.99 for it. But that's already an established PC game.
It really is hard to say without knowing anything about your game, though. It depends on the type of game. Is it a game where you can just pick up and play for a few minutes at a time, like Angry Birds or Doodle Jump? Or is it something like an RPG with some actual content?
Again, I'm no means a market pro, or anything like that. Just input from your average consumer, I wouldn't pay $2.99 for a game that's unknown from an unknown maker, when the market is already saturated with thousands of free games, or ones for just $0.99.