In recent years, cloud computing has become one of the most dominant computing paradigms. Researchers have explored the possibility of building clouds out of loosely associated mobile computing devices. However, most such efforts failed due to the lack of a proper incentive model for the mobile device owners. In this paper, we propose CellCloud -a practical mobile cloud architecture, which can be easily deployed on existing cellular phone network infrastructures. CellCloud is based on a novel reputation-based economic incentive model in order to compensate the mobile device owners for the use of their phones as cloud computing nodes. CellCloud offers a practical model for performing cloud operations, with lower costs compared to a traditional cloud. We provide an elaborate analysis of the model with security and economic incentives as the major focus. Along with presenting a cost equation model, we perform extensive simulations to evaluate the performance and also analyze the feasibility of our proposed model. Our simulation results show that CellCloud creates a win-win scenario for all three stakeholders (client, cloud provider, and mobile device owners) to ensure the formation of a successful mobile cloud architecture.