How Much Does it Cost to Develop and Build an App

  •  

September 27, 2019

September 1, 2019

According to the latest study by comScore, mobile now represents 65% of digital media time, while the desktop has become a “secondary touch point.”

The total revenues in the App Store reached $60 billion last year, while developers earned over $20 billion on app sales.

But for aspiring entrepreneurs who want to capitalize on these developments, the potential is meaningless if they can’t answer a simple question: how much does it cost me to build an app?

The answer isn’t simple, but it isn’t as convoluted as many developers make it seem.

Many app developers will either build you a subpar app for a lower fee — you get what you pay for — or get you in the door at a low price only to invoice you 5x the original estimate down the road. What you rarely see is a realistic depiction of what an app costs and how that’s calculated.

We wanted to change that.

In the following guide, we break down the total costs of launching an app, including:

  • The average cost of app development based on a simplification of 3 factors
  • How your app platform plays a crucial role in the final costs
  • Our app development process, and why understanding this explains the cost structure
  • Why app costs can change from the initial upfront estimate, and what you can do to keep it stable

How much does it cost to build an app?

The average cost to make an app ranges from $80K – $250K+, depending on what type of app you want to create:

  • Simple apps cost up to $80,000.
  • Basic database apps cost between $100,000 – $150,000.
  • Advanced, multi-feature apps cost $150,000 – $250,000.
  • Game apps can cost anywhere from $100,000 to $250,000+, based on quality and detail.

Delivery times vary too, depending on your engineering team or app development company. From a couple of weeks to a month for a simple app, three plus months for a database app, and three to nine months for more complex multi-feature apps.

What determines the cost of an app?

There are three high-level factors we look for when calculating the cost to build a mobile app:

  • Number of platforms
  • Design Requirements
  • Complexity

Let’s review those one by one.

1. Platforms

There are two options here: native and hybrid/cross-platform.

a) Native

“Native apps” are written in the same programming language as the platform for which the app is designed. For example, for iOS it’s Swift and for Android it’s Java.

These apps are typically faster and more reliable. They have access to a phone’s features, such as its camera and address book. Developing natively on a platform generally leads to a better, sharper user experience (UX). They’re usually more expensive than other apps.

b) Hybrid/cross-platform

“Cross-platform” means that they are built for multiple platforms — typically, Android and iOS. They are like native apps, but they’re built using a combination of the web and native technologies that are distributed via a native app store.

They run on both platforms, but don’t have access to phone features and can be quite problematic to design, as both platforms have different conventions.

2. Design Requirements

If your app has some design requirements that can be templated, it takes less time — and the cost savings get passed onto you. A rule of thumb: the more customization, the more it will cost.

  • Visual design: It’s what gives your app its look and feel. The importance of visual design can be best summed up by a quote from the icon of product design, Dieter Rams: “The aesthetic quality of a product is integral to its usefulness because products we use every day affect our person and our well-being. But only well-executed objects can be beautiful.”
  • UX design: UX design is about how it works. It’s the discipline in design that studies user behavior and uses data to design user experiences that deliver specific results. The result can be anything from engagement or successful on-boarding to making a product become an everyday part of a user’s life.
  • Icon, logo and branding: Branding can be a powerful asset. In fact, according to Peter Thiel, brand alone can give you a monopoly in the market. Take Apple for example. Whether you agree or not, you will need to invest at least into solid icon and logo design. Icon is what gets you noticed in the App Store and has a big impact on the user’s decision to download your app.
  • Copywriting: The best user experiences have copy that excites and compels. It takes a lot of effort to identify the style of voice and tone that matches your app’s brand. To get it right, you’ll need a persuasive copy that motivates users to explore the app. It should clearly state the benefits and help users understand the value of using the different features it has.

The icon, logo, and copy can cost you anywhere between $500 to $2000 each. For UX and visual design, expect to pay much more. A pro UX design firm can charge you up to $20,000 a project.

Most developer shops will provide you with their own design team. From icon and visual design to UX design, you’ll get it all done.

If you’ll looking to get it done in-house, the rates to hire a designer can vary a lot. Expect to pay at least $50 per hour on the lower end and up to $250 per hour for a senior UX designer.

Also bear in mind that the UX design is an ongoing affair. You should never stop learning, testing, and improving. Icon design, on the other hand, is something that needs to be redone every couple of years.

3. Complexity

This is where it gets tricky. When you want to build complex features or integrate with other platforms, the development and QA process can get more time intensive — which gets factored into the cost.

Typical complexities include:

  • Third parties provided information
  • Payments
  • In-app purchases

What complexities increase the cost of app development?

“Complexity” can also be a proxy for functionality and features. These include:

  • Simple apps: This would be an app with three or four screens that serve one basic function and don’t store any data. An example would be a calculator or a timer.
  • Database / API apps: If your app needs to store some data on the user’s device or a remote server, then you’ll need something more complex. If it requires users to register and sign in, sync data between multiple devices, or you have a lot of content to utilize, your app falls into this category.
  • Multi-Featured/Enterprise Apps: If you’re looking to offer several key features and a completely bespoke user interface design tailored to users’ needs, this is your category. The timeframe and price can range based on the scope of the project.
  • Games: As it is with other apps, games vary in complexity and functionality and the price changes accordingly. In addition to app development, games require a high-quality user experience, storyboards, and mechanics that hook the user, which adds to the total cost.

Additional Features

Then there are additional features that come into play when determining mobile app development cost. On top of the basic functionality, you may require some other features like email login or geolocation tracking. Here are some examples and their pricing:

  • Email Login: A very simple feature most apps have. The reason for it is that collecting emails is incredibly useful for your marketing efforts.
  • Social Login: Login with, for example, Facebook, Twitter, or Google. Again, very important from the marketing point of view, as social logins provide you with important user data.
  • Social Integration: A feature that allows apps to post on a user’s social media. It can be leveraged to boost your app’s growth through “word-of-mouth” and “viral” marketing.
  • Rating System: Thumbs up/down or rating of content and so on. This would be useful for something like a Restaurant review app or recipe app where there’s a lot of user generated content.
  • User Profiles: If you want to allow users to create their own user profiles. For example, for a social app or a ride-sharing app.
  • In-App Purchases: To charge users for additional features, downloads, and services from within the app using “In-App Purchases.”
  • Geo-Location: Locate users or collect data about their geographic location. This can help you make their experience more relevant to them and collect valuable data.
  • Sync Data Across Devices: In case you’re building something like a task management app that your customers will use on both desktop and mobile.

Simple features like social login and integration can add between $3000 – $15000 in costs. The more advanced user profiles or geo-location can add about $7500 or more to the basic cost.

App pricing models

Developers will generally give you an initial estimate with a scope of work, or charge hourly on a pay-as-you-go model.

Fixed Rate: We put together an estimate based on agreed-upon concepts (more on that below). This is the most predictable form of app pricing model; there are only deviations when the scope changes as the project evolves.

Time and materials: We provide an upfront estimate, but that is what it is: an estimate. We charge on a weekly or monthly basis as we go along. This is better suited to projects that are more open-ended, where the scope is determined during the development process.

How are app development costs estimated?

We do estimates using the agile method, where an app is broken down into:

  • Concepts
  • Stories
  • Story-points

Concepts are the sum of all the features described in the previous section. Stories are the features required to make the concept come to life. Story-points factor into velocity, aka how long it takes to get built.

Once we understand the concept of an app and match it to features, we can break that down int stories with estimated story-points/velocity. This will tell us how much time and resources are required to build the app, which represent the bulk of the cost.

Why initial estimates often go under

There are two reasons why apps cost more than estimated:

  1. Bait-and-switch development shops that purposely give you a low number to get you in the door, then start charging you for every line of code.
  2. The scope increases as the project develops.

We are extremely diligent in our estimates, which means transparency for clients and a simple understanding of what they can expect for a project. We don’t have to worry about #1.

This leaves us with problem #2.

Entrepreneurs want to make the best possible product. As the app comes alive, they play around with it, show their friends — and the scope naturally increases. You get new ideas and expand the vision of the app. This is the best and worst part about app development: the continued ideation and tinkering that leads to an amazing product.

When the scope changes, you have three options:

  1. Swap features: if you get a new idea, does it make sense to replace with a prior one? This way you keep the same scope — and costs.
  2. Pay extra: If you want to have your cake and eat it, too, we estimate the cost of the additional feature and then build it.
  3. Drop: When you revisit the overall scope, you might decide that the new features simply aren’t worth it at this stage.

How long does it take to build an app?

On average, it takes 20 weeks, or 4-5 months to build a quality MVP app. This can be closer to 3 months for simpler apps, or 6+ months for apps on the high end of the complexity scale.

4 ways to build a mobile app

Who will build your app affects the cost about as much as the functionality it’s going to have. But while in app design, a cheap and simple minimum viable product works great; in choosing your developer, you have to be careful.

Cheaper isn’t necessarily better; in fact, it can be a big mistake. We’ll get to that later.

If you’re looking to build an app, you have several options available — each with positives and negatives — including:

1. Offshore teams

When it comes to offshore teams, they’re probably your cheapest option. This means you’ll hire a team in India or Russia and work remotely.

The price is low, but the risk however is in the quality of the final product. You’re not seeing the people you’ll work with and usually these shops have little to show for their portfolio, as the apps that are actually successful and make millions of dollars are rarely built that way.

What you’ll get, however, is a team. What you don’t get, compared to a developer shop, is a full-fledged team; a team with a product manager, designer, developers, and so on.

2. Freelancers

You can hire a freelancer from one of the freelance websites too. It’s a similar thing to an offshore firm. Good developers are expensive. You can hire a student or a friend, but the work will be probably much slower and the lack of experience will show.

3. Technical co-founder

Technical co-founders are a great option if you’re an established business person with a track record. That’s because to attract top-talent and have them bet their career on you is not easy.

These guys are approached a lot, especially by “idea guys” who offer something along the lines of “I don’t really know what I’m talking about but I just got an idea for the next Facebook. All I need you to do is all of the work in return for five percent of the gazillion dollars it’s going to make.”

Co-founders are paid in equity and can be an incredible asset.

4. Established app development company

Developer shops are the most expensive option here; they’re also, alongside with technical co-founder, the surest way to build a great product.

Utility falls into this category.

Some developer shops are innovative and have top grossing apps under their belt. They provide you with a full fledged team and experience in building and shipping successful products.

Others are much better at building out sales teams and pushing over-priced projects without the proven ability to fulfill.

Look at their reputation, reviews, and awards, and most importantly – track record. Talk to their past clients and meet the team. See how invested they feel in your success. Don’t go with the first developer you meet; it’s an important decision to make.

3 things to keep in mind when hiring app developers

Product Comes First

One thing you must realize here is that it’s not about how much you spend but how great of a product are you going to build.

Instagram sold for one billion dollars in less than a year. They spent about $250,000 to build a prototype. Whether the cost was $50,000 or $500,000 makes no difference when compared to the exit value.

What’s important is that they’ve built a successful product. You can save $50,000, but what’s the use if it means building an inferior product that will just net you a loss?

In other words, yes money matters, but product comes first.

The real cost of design

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” Steve Jobs

It doesn’t matter how great your technology is: if your design sucks, no one will use your app. There’s a lot of misconception around the role of design though.

To make it clear, design is as important as your technology. It’s what users see and interact with. It’s what sells your app and the idea behind it. Ultimately, it’s what makes them sign up and use the app over the long term.

Design plays a key role in solving the user’s problem. If you’re looking to build a profitable app, you will have to nail this aspect of product development as much as the technical one.

Don’t forget the marketing

Let me ruin it for you. “Build it and they will come,” never works. This tech industry mantra got popularized during the failed dot-com boom and for some reason, it’s still hanging around. It’s a lie.

You will have to invest in sales and marketing. Why? Because your app, no matter how well executed, can still be a loser. In fact, 59% of apps don’t even make enough money to break even on their development costs.

Around 12% of all app developers earn over $50,000 in annual App Store revenues. The latest data shows that over 94% of all revenues go to one percent of monetized apps.

Data shows that the main difference is that the money losers dedicate zero dollars of total development costs to marketing and spend less than five percent of their time on sales and marketing activities.

In the App Store, to get noticed, you need to hit the charts and to hit the charts, you need to get a lot of users in a short period of time. Without paid marketing, it’s almost impossible.

But don’t expect to just throw money on ads. You will end up losing most of it. App marketing is a science of figuring out the best business model that delivers ROI.

To get there, you want to test multiple channels and compare the data. The best advice I can give you is start early. When you hit the App Store, make sure to have at least hundreds of users waiting in line for the release.

Growing your user-base will cost you both money and time. A lot of it. The cost to figure out the right business model can vary a lot, but you should set at least $35,000 aside for your sales and marketing efforts.

Obviously, there’s more to it. Aside from sales and marketing, you’ll need to pay App Store and Google Play fees, servers and backend support, customer support, accounting and legal costs, office or co-working space, and further development costs.

Putting it all together

So, how much should you budget? Again, it all varies. But to put it in perspective, a recent 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 build an app, the website calculated $171,450 to be the median cost per app.

According to a survey of 300 senior mobile practitioners around the world by Enterprise Mobility Exchange, the most common budget size for the next 12-18 months was $250,000–$500,000. But that’s for corporate budgets.

To put more perspective into this, to build an MVP of something as simple as Instagram or WhatsApp can cost you anywhere between $100,000 to $250,000. MVP for an app like Uber would require an investment of at least $1,000,000.

Based on the data above, you’ll need to make your own analysis.

Let's Talk

We’ve worked with clients of all sizes, from enterprise brands to funded startups. Let’s talk about your project and how we can help provide value.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.