In 2017, mobile app downloads reached 175 billion and the combined revenues in app stores totaled $86 billion. Games seem to be the most popular category, but businesses definitely should take a slice of the cake too.
Now that virtually all companies are using social media to create brand awareness and boost sales, and even a mobile-first website is not enough any longer, a custom mobile app can be extremely beneficial for a business. A user-friendly brand app:
… and much more. With so many benefits to having a mobile app, what is still holding some businesses back? Is it the time and money investment of an app, or rather the lack of information?
Onix’ clients often ask us estimate the cost to develop an app so they can start planning or securing funds for the project. In this post, we will explain what software development factors impact the price. There will also be some tips about how to get a more precise quote or figure out a rough estimate on your own.
The easiest way to get an idea of how much your project might cost is to look for information on similar mobile apps. For example, different sources estimate the cloning of:
A 2017 survey of 12 leading app developers by Clutch revealed a wide range of $30,000 to $700,000 to develop a mobile app. Based on the average number of hours required to create an iOS-only app, they established the average cost to be $38,000 for a simple and $171,000 for a complex app.
It’s clear that an ‘average cost’ will hardly help you determine the cost to create an app for your business. It’s important to consider the variations in hourly rates in different economies, the developers or agency you happen to engage, and the future app’s unique list of requirements.
App development cost = (Features X Development time) x Hourly rate
You will be dealing with these variables at each step of the mobile app development process:
The decisions and choices you make at each stage will directly affect the final development cost and timeframe.
Features are the primary factor which determine the mobile app development cost. In general, mobile apps can be broken into four major groups, depending on the purpose, complexity, and hence the total work hours required:
Delivery time may depend on your development team’s velocity, but a simple app may take from two weeks to three months to complete, a dynamic app - some 3-6 months, and a sophisticated multi-feature app may take 3-9 months to create. If time is critical, the team may need to engage extra staff or pay overtime. This will result in higher overall costs.
The selection of features directly impacts the future product’s user-friendliness, monetization, viral potential, marketing opportunities, etc. Important things to consider include, but are not limited to:
Some of these require only several hours of development, but each will compound the total cost. Consider your long-term goals. If the product is the backbone of your startup, more features and higher cost are reasonable. But if you are only developing a prototype, you may launch with a core feature stack. Eventually, you’d build on with micro updates allowing you to hear user feedback and more effectively adjust the roadmap as the product grows and evolves.
A few other factors driving the cost of mobile application development are:
An app can be used on a variety of devices. The price of the app development will depend on which mobile app development technologies you choose:
Currently, it’s mainly about the two leading mobile operating systems - iOS and Android. Android users dominate the mobile web traffic. The cost per install is significantly lower for an Android app than for iOS, which means a wider market for a business. However, an Android app generally takes 2-3 times longer to build than the same iOS app. Thus, although the cost per hour for developing iOS and Android apps are almost equal, it turns out to be more expensive to create an Android app.
Simultaneously, Apple’s stricter guidelines translate to better quality and security. Convinced by these and the higher speed of development, some companies opt to start with an iOS-only app. If it proves to be successful, an Android app follows.
Choose the platform where your target consumers really are, but accessibility on both iOS and Android seems wisest. If you decide to launch on both mobile platforms simultaneously, there will also generally be some crossover that ultimately lowers the total cost. More often than not, there will be a common back-end architecture. Moreover, since the team had detected and resolved some issues when building the app for one platform, they will be able to develop the subsequent one faster.
In any case, you will also have to decide what specific devices your mobile app will support. For example, it may be accessible only on smartphones like iPhone 6S, iPhone 6S+, or Samsung Galaxy S6, or on multiple versions of tablets as well. The development of custom interfaces to support all screen resolutions can be time-consuming and costly for Android. Supporting all of the OS versions of all devices will be expensive, so it’s better to select only the most popular ones.
If the developers are required to pay a license fee for technologies, it may significantly increase an overall mobile app development cost. It will depend on the annual fees and the number of devices.
While the average surveyed cost of an app's design is less than $5,000, it’s as important as technology. There are several aspects to it:
If you want the design to give you a competitive advantage, hire a proven design team with an extensive portfolio. But remember that outside designers will have to collaborate with the app development team, which may slow down the work. Often it proves more convenient and cost-effective to have an app development company handle both the design and development of your app. (Onix has a design department that is well-practiced at designing for mobile too.) From branding to UX design, and then from coding to deployment - you can have it all done under the same roof.
The talent and experience of the development team affect the cost of mobile application development as much as its envisioned functionality. When recruiting the team, your choices can either save or add a substantial cost to the project. Cheaper isn’t necessarily better and can be often quite the opposite.
Unless you are blessed with a lean in-house team or someone who can play multiple roles, you’ll have to look for experts at each step of the software development process. Developers will be programming the app screens in Objective-C/Swift for iOS or Java/Kotlin for Android. Another developer will work on the server side application and APIs. Quality assurance should participate from the onset. Installing the application, creation of a reliable server environment, and tackling database redundancy, backup, security, performance and scalability of the app require an experienced specialist commonly referred to as DevOps.
Depending on the way you are going to create the app, you can choose one of the four primary models of engaging talent (in the price-decreasing order):
If you’re an established business person, you may recruit technical co-founders and pay them in equity.
App development agencies provide a complete team necessary for building and launching a product. It’s the surest way to make a quality app, from the planning stage to post-launch marketing, but also the most expensive. Such agencies charge $200-$300/hour for their services.
The larger the app agency (with its track record, reputation, reviews, and awards), the higher the price usually is. Big agencies offer a broader range of services, larger teams, heaps of experience, mature development procedures, and a big brand guarantee of quality and timely delivery. If your app is very sophisticated, this may be the only development option for you.
Small agencies (3-10 members) typically focus on a specific class of apps. While an attractive middle ground on quality and consistency, small domestic agencies also provide significant cost savings as compared to large agencies.
Hiring freelancers may be the cheapest option, but may turn out the most expensive. If the freelancer happens to be slow, incompetent, or irresponsible, your project will drag on indefinitely. Hiring a handful of freelancers only increases the risks: each of them can potentially cause problems and delays. On top of that, many freelance platforms are plagued by the ‘problem of middle-man freelancers.’ In the worst scenario, you’ll be throwing money down the drain.
However, if you manage to recruit a group of good freelancers, you can get a quality app made at a lower cost. Good freelancers may provide the quality level of an app development company, but their prices differ drastically depending on the freelancers’ locations. India boasts about the lowest rates ($10-75+ per hour) while the US, Canada, and the UK have the highest ($50-$250 per hour).
This is another good option for software development at a reasonable price. Outsourcing companies combine the benefits of app development agencies and international freelancers. Most will offer a full-fledged team of designers, developers, and project managers for an entire project - all at an Indian or East European price. For example, the average hourly rate is typically three times lower in Ukraine than in the US, with the same quality and expertise. Collaboration across oceans has become easier; JIRA, Slack, and GitHub are used for organizing the process and daily communication with customers.
However, the service price shouldn’t be the ultimate deciding factor for hiring an offshore development team. Remember that it may be a years-long relationship if they should continue maintaining your mobile app. Before making the decision, speak with several teams, search each one’s portfolio for recent examples that are most relevant to your project, ask for references, and read clients’ feedback and other information you may find online.
On top of the components disclosed above, there are hidden costs that weigh on the overall cost of a mobile app. For example, if you don’t have QA on the team, you’ll have to wait until the end of the development to test the product in one fell swoop. It’s not so much the testing that will come at a cost, but fixing the issues.
You’ll need to pay App Store and Google Play fees, admin, servers and backend support, customer support, legal, and further development costs. According to Clutch, infrastructure-related activities like the initial setup and basic controls, data storage, third-party integration, access to enterprise data, data encryption, and scalability are a massive cost driver.
Maintenance expense is not included in the initial app development cost breakdown, but on average, 15-20% of the original development costs are spent annually on technical support. Some developers, though, may integrate short-term app maintenance into their build price. Onix does offer free maintenance for three months.
Your intellectual property should be protected. Get a patent to protect your invention and ideas. If your app’s name sticks, register it as a trademark. Protect the text, visuals, and multimedia of your mobile app through copyright. It entails extra expenses, but it’s important.
Sales and marketing can be another massive expense. Without the expensive paid marketing, it’s almost impossible to get noticed on app stores. Not having the budget to market the app can be fatal for the entire project.
Like other software development companies, Onix is contacted daily by people with great ideas asking for quotes for their apps and websites. However, as interested as we are, it’s impossible to estimate the price right off the bat. For this reason, most companies would request the future product’s specification first.
A mobile app development specification document is known as a requirements document or product specification. The specification not only provides a foundation for a successful product but also serves as a basis for the app development cost estimate.
Here you can find some tips on crafting a decent requirements document, which is mostly about conveying your vision to those who will work on the product. In a nutshell:
The last is one of the most efficient methods. Around 70% of mobile app development time is spent on interface implementation, so having all of the screens would give the design and development teams a better sense of the scope of the work.
Present your project to at least five different developers or agencies. At Onix, we’d also ask about your background. Can you tell us about your business or organization? Is it your first app? Do you have a web solution already? What are your long-term goals for the product? What problems have you encountered? All this information helps software developers assess your business concept and propose relevant solutions. If a customer wants a non-disclosure agreement to be signed, we do this on a regular basis. We respect our customers’ confidentiality.
After analyzing the requirements document, if available, we typically do the first rough assessment of the project based on the approximate number of hours required. If the customer has approved it, we’ll discuss the requirements in depth and further learn their needs, hesitations, and preferences.
Most times customers don’t like to disclose their budget limitations, but if they exist, it’s better to at least mention them during a call. Based on the available budget and additional product insights provided, the project manager will be able to estimate what’s feasible for that money and prioritize features. There is always an opportunity to suggest better, more realistic, or cost-effective options. We’ll be sure to lay them out with the reasoning in plain English.
After we identified requirements for each stage of the design and development, we present a more detailed and accurate app development cost breakdown. This gives the client a ballpark range to plan for, but we always warn them it’s not carved in stone: any changes and additions that the client may require eventually will affect the total final cost for sure.
Pricing falls into two different structures:
If you are not yet ready to contact an app development company, there is an alternative cost estimation opportunity. You can use one of the online development cost calculators, such as:
It goes without saying that such instruments give only a rough app development cost estimate. Although they are based on the same development steps and factors that go into creating a quote for a mobile app project, every app’s unique requirements will carry a corresponding cost. You won’t know precisely how much each feature may cost until you’ve solicited quotes from multiple qualified developers. Moreover, the calculators won’t account for a developer’s specific method for charging. Still, a development cost calculator can give you a good ballpark range of what to expect before asking for quotes.
The cost of a mobile application development may range from $1,000 to half a million dollars. Any project’s cost correlates with the time required and the quality that should be achieved. In the case of mobile apps, this means primarily whether the app is hybrid or native, the number and complexity of features, and the choice of the development team.
An app development cost breakdown includes, but may not be limited to:
The business model driving your decisions, the platform, the required functionality and design can hardly be manipulated. However, engaging foreign developers and any trade-offs you’re willing to make can help reduce the mobile app development cost significantly.
Creation of a successful product requires many considerations, such as the concept, monetization method, design, user-friendliness, etc., as well as different skills at all steps. Based in Eastern Europe, Onix provides full-cycle web and mobile app development, including analysis, UI/UX design, development, testing, deployment, and further updates. We’ll be glad to review your ideas and make recommendations for a great final result.
Contact us if you’re ready to start a new project!
Special thanks to Ivan Sagal of Onix’ iOS Mobile Development department for the valuable insights and assistance in writing this post!