Cost of app development

The Era of smartphones

Approximately 3.5 billion, or 45.12% of the world’s population, are smartphone users. And all of them have multiple mobile applications installed on their smartphones and use at least one of them on a regular basis. 

Studies report that of the total time spent on their phones, an average user spends approximately 90% of the time in apps.

These numbers will definitely be encouraging to anyone thinking about launching a digital start-up. 

However, the two most important questions of the minds of every fledgling digital entrepreneur are ‘How much will it cost to develop my application?’ and ‘What factors influence the cost?’.

The pitfalls of free online resources

A quick web search to this question will lead you to multiple sites with online mobile app development cost estimators. However, businesses rarely provide any information for free without it suiting their own needs.

Often, these estimator tools are nothing more than cheap marketing tactics to gain your attention and provide estimations that rarely cover the full cost of mobile app development.

And even if they manage to develop an application within the estimate that they initially quote, chances are that the end product will be a simulacrum of your initial idea that is inferior in every respect.

As for the actual question, most experts usually respond with ‘It depends on a lot of factors’– which raises more questions than it answers.

In the following sections, we will delve into a complete breakdown of the variables affecting mobile app development costs.

How much does it actually cost to develop a mobile application?

According to Clutch’s 2017 Survey, the average minimum app development cost varies between $5,000 and $10,000, with the typical cost likely to be much higher. 

 The cost of developing an app usually depends on these following factors – 

  • Development approach (native, hybrid, mobile web, etc.)
  • Complexity (simple, moderate, or complex)
  • Type (mobile game, social networking, online delivery, etc.)
  • Platform (Android vs. iOS)
  • Design (minimalistic vs. highly detailed)
  • Number of app features

Taking an average hourly rate of $50, the cost of developing an app can be approximated as follows 

Complexity Features Time (hours) Cost at $50/h (approx.)
Simple No back-end, No API integration, standard UI, core feature set, 1 platform 400 $20,000
Moderate Custom UI, API integration, back-end server, more features, multiple platforms 500-800 $25,000-40,000
Complex Multi-language support, 3rd party integrations, complex app design, real-time features, multiple platforms 1000-3000 $50,000-150,000

These numbers are but an approximation based on minimum development hours, the average cost per hour, and general feature sets. 

However, you can only be sure of the actual price once you have finalized your app’s specifications.

What factors affect the cost?

Once you understand the factors affecting app development cost, you can drive your project’s cost towards your desired price range and set your initial budgets accordingly. Some of these factors have been outlined below.

The business model

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Notice how Tony Stark is a billionaire first and a philanthropist later?

Similarly, your app’s primary objective should be to generate revenue. And deciding upon the right revenue generation model is an important consideration that must precede the app development process.

Rather unsurprisingly, it is the biggest factor that influences development cost.

Apps can be either free to download or paid. Free apps usually generate revenue through in-app purchases, sponsorships and advertisements. eCommerce apps make money by selling products and earning commission from their customers.

All these apps have different costs of development. For example, a free app with in-app purchases is more difficult to develop as compared to a paid app and consequently costs more. Similarly, an eCommerce app involves a greater investment of time and money. 

Knowing your target audience gives you the biggest insight into what strategies you should employ during app development. These important questions must be addressed to arrive at the ballpark figure of your app development costs.

  1. What platforms does my target audience use?
  2. What problem of my target audience does my app solve?
  3. Does my app need any third-party integrations to make it more responsive? 
  4. Will my app be free to download or paid? What kind of business model will work best for my target audience?

For example, suppose your app is targeted towards the Asian market and users from the subcontinent.

Generally, Android is more popular in Asia, while iOS is the preferred platform for users of North American countries. Thus, Android should be your choice of platform for developing the app. 

Moreover, users of this platform usually spend less on apps than the average iOS user. Thus a free or economical app with in-app ads or purchases will perform better in the Asian market as compared to a paid app. 

Thus, choosing the appropriate business model for your app that successfully caters to its audience will determine the success and popularity of your app.

Single or Cross Platform

Choosing whether your app will be available for Android, iOS or multiple platforms is a significant factor affecting the final cost. 

An application which is built following the guidelines of a specific operating system is called native. They are usually large and heavy apps with a wide range of features and are optimized for high performance and best user experience.  

Since a native app has to be developed specifically for a platform, logically the cost of app development increases with the number of platforms you want to target.

In contrast, hybrid (or cross-platform) apps have a single code that works with multiple operating systems – meaning less development and maintenance costs. However, they lack access to APIs and do not offer the native experience. 

Most of the app development companies recommend a native development approach due to the technical superiority and better performance of native apps.

Recently, it has become even easier to develop natively compiled applications for multiple platforms from a single codebase due to the emergence of Google’s Flutter and Facebook’s React Native.

As for the choice between Android or iOS, there is no difference in app development costs based on platform. The choice solely depends on the type of customer you are targeting.

Type of developer

Hiring the right development team can make or break your project.  

Depending on your needs and budget, you can consider these three approaches – 

1. Go with a mobile app development team – At first glance, this option might seem like an expensive choice. However, you get a dedicated and reliable team who work around the clock to develop the best version of your app idea.

Additionally, before agreeing to anything, you can browse through their portfolio and know about their hourly rates and development time, allowing you to make an informed decision.

The success of any app solely rests on your ability to think about and improvise for every possible scenario. Successful companies like Uber have dedicated teams for this purpose.

However, big development firms naturally charge more than a small team of 3-10 developers. 

2. Hire freelancers – Freelancers are individual developers who make apps of quality similar to those of developer companies at a fraction of the cost.

However, you have to search for freelancers with appropriate experience and may have to employ more than one to work on your app. 

Moreover, you have to coordinate with all of them individually and ensure that your project does not go off the rails.

It then becomes your responsibility to keep a track of your budget and make sure that your app gets developed on time.

3. D-I-Y approach – If you have the time and technical expertise and want full control over the app development process, you could take a swing at the D-I-Y approach. 

There are app templates or starter kits available for download online for a nominal fee. You can then customize according to your needs – which may require you to hire developers or graphic designers. 

There is also the option of online app makers, which have monthly subscriptions or upfront payment options. 

However, they provide really limited options and the consequent app is buggy, badly optimized, and lacks essential features.

Location of the development team

When it comes to choosing an app development team, there is no dearth of options. Thousands of companies worldwide – be it well-established or recently founded, local or foreign, large or small –  claim to be the best app developers. 

It is no secret that geographical location plays an important role in dictating the cost of mobile app development. 

App development costs are highest in North America, where hourly costs can start from $20 per hour and go as high as $250 per hour, whereas developers in India, the fastest growing tech hub of the world, and Indonesia are satisfied with an hourly rate of $10-75. 

The following table summarizes the hourly rates in some countries across the world.

Region Cost($)/hour 
North America (USA and Canada) 50-250
Australia 50-150
Western Europe and United Kingdom 35-175
Eastern Europe 20-150
India 10-80
Indonesia 10-20

Deciding whether to employ a local development team or outsource the work to an offshore company thus can have a significant impact on the cost of the app development. 

While a local developer offers benefits like physical proximity and ease of communication through face-to-face meetings, their high hourly rates may not be feasible, especially if you are on a shoestring budget. 

Moreover, don’t be fooled into thinking that a high price necessarily means a high quality of product. 

Although the time zone difference can be a big obstacle for effective communication, offshore developers often make eager advances and are ready to meet any organizational demands. 

The emergence of communication tools like Skype, GitHub, JIRA etc. has also streamlined the process project management over the internet and made foriegn collaboration seem more feasible.

These developers also offer a high level of expertise at competitive prices.

Ultimately, the choice of the location of the development team (onshore vs offshore) will depend on your organization’s needs and budget. 

Structure of the development team

Ideally, even a small app with minimal features should be handled by a team and not an individual. A team environment ensures effective collaboration between every person responsible for a particular part of the project.

A simple project can be handled effectively by a basic development team, which consists of the following members – 

1. Business analyst  – A business analyst’s primary role is to identify potential tech and business problems, analyze the competition and determine the project value.

Their main job is to frame the planning phase and prevent any costly changes to the scope of the project and misunderstanding during the development phase.

A business analyst can have hourly rates of $30-$42 in Asia and as much as $205 in the United States.

2. Project manager – A project manager’s role is to coordinate between the different specialists of the team and ensure that the product complies with all the requirements and is ready on time.

A project manager can charge an hourly rate in between $35 to $233, depending upon the geographical location.

3. Programmer – Programmers write the code for the app keeping in mind all the tech and business specifications. 

Depending upon the platform of release, you may have to employ one or more than one iOS and/or Android developers, who can charge an hourly rate of $18-$150 approximately.

4. UI/UX designer – A designer’s job is to work on the app’s interface keeping the user’s preference and pain in mind.

Their hourly costs can range from $25-$165 per hour.

5. QA engineer – A Quality Assurance engineer performs various tests like regression, smoke, load, etc. to check the stability of the app as well as evaluates its UI and other design elements. 

They are instrumental in determining if the app meets all the requirements set initially during the planning phase and can charge from $15 to $170 per hour for their services.

However, keep in mind that the complexity of your project will determine the size of your development team – the greater the complexity, the bigger the team.

Type of app

Every app is unique, with different features, business context designs, and the labor of love of all the people involved in its conceptualization. 

However, apps can be broadly classified into the following main categories according to their functionalities:

1. Basic apps – These kinds of apps have 5-6 screens at max and neither require a back-end nor an active internet connection to run. They take around a month to develop and cost around $15,000.

Some examples are Calculator, Camera, Clock, etc. 

2. Games – These can be simple 2D, side-scrolling 8 or 16-bit software or more complex 3D graphics and physics, AR support, and even social media integration.

A simple game can cost around $5,000-$10,000, whereas a complex game’s development cost can start at $400,000

3. Data-driven apps – These apps show a specific type of information like the Weather app, Calendar app, or Stock app.  

As they require some back-end work, they take around 1-1.5 months to develop and their cost of development exceeds $15,000.

4. Authentication apps – Authentication apps like Google Drive require the user to login to access full app functionality. They allow the user to create a personal account and interact with data, which is synchronized and accessible across various devices. 

As these apps have many additional features like the admin panel, they are more difficult to develop and may take up to 3-5 months and cost around $50,000.  

5. Social networking apps – Apart from popular candidates like Facebook, Twitter, and LinkedIn, several subtypes are also encompassed under the umbrella term ‘Social networking’ app – like media sharing, blogs, dating apps, etc.  

They require a back-end infrastructure that can process as a lot of data as these apps’ primary functionalities revolve around simplifying social interactions, chatting, and information sharing.

They can take over 9 months of development, costing anywhere between $50,000 to $240,000.

6. On-demand apps – These apps offer a specific commodity to the user to satisfy their needs. Examples of such apps are Uber, Netflix, UberEats, etc. 

They contain a ton of features like log in or communication component, payment options, etc. They are usually a combination of two different apps with their own logic, UI/UX design, and different functionalities. 

This makes their development costs reach $70,000-$80,000 for each platform.

7. eCommerce appsAmazon, eBay, Alibaba, and other such similar apps offer the users a virtual marketplace for buying and selling commodities.

Due to the feature intensive nature of these apps, they can take several months to develop and cost anywhere between $50,000 to $240,000.

8. IoT and Hardware apps – Internet-of-Things apps connect your mobile device to other physical objects or equipment (called ‘smart’ items) with technology like WiFi or Bluetooth.

They can be made in 3-5 months and can cost approximately $50,000.

Features

The cost of your app will also be decided by which features you wish to include in the final version of your app. 

Here we have given a breakdown of the cost and developer hours required to integrate some basic features into your app:

Feature Developer Hours Cost($)
User Login 20 500-1000
In-app navigation 10+ 250-500
Geolocation 50 1,250-2,500
Chat/Messaging 80+ 2,000-4,000
Ads 20-50 1,000-4,000
In-app purchases 30 750-1,500
Payment integration 50+ 2,500-5,000
Push Notifications 20-200 1,000-10,000
Data encryption 20 500-1,000
Search 10 250-500
Customization 35+ 1,500+

Product design

First impressions matter, especially in a domain as competitive as the app market. 

The design of your app is a crucial factor in ensuring your app’s success and is backed up by stats – apps that have unique user interface design enjoy 1.5x larger market share.

However, creating great designs is a complicated process as well as capital intensive. 

You will see a marked difference between the designs of a $100 and $1000 designer – and the high cost of a clean, uncomplicated and uncluttered app design should be seen as an investment rather than an unnecessary expenditure.

App maintenance

The process of app development does not end once the app is published in the marketplace – it is just the beginning. You should target your Daily Active Users (DAU) as well as new users by constantly improving your app’s performance through patches and bug fixes.

Maintenance usually encompasses these following tasks – 

  • Bug fixing and troubleshooting
  • Code optimization
  • Addition of new features
  • Updates for latest OS versions
  • Support for latest versions of third-party services 

Clutch’s 2017 survey puts the numerical figure of app maintenance to be around $5,000-$10,000 per year, while Outsystem’s 2018-19 survey says that on average, the cost of app maintenance may equate to 15% to 20% of the development cost per year. 

Thus it makes sense to have an app maintenance budget apart from the app development budget to facilitate the app’s support and ongoing development.

Conclusion

Hopefully, this article has been informative and can guide you in making an informed decision in the future. In case there are questions in your mind that this article hasn’t covered, don’t hesitate to reach out.

Idea Usher has years of collective experience in developing customized applications. We provide complete business solutions to catapult your venture to success. Get in touch with us at [email protected] to get free quotes.

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