App development cost can vary a lot. An App can cost anywhere from $5,000 to $200,000+. Hence finding an accurate estimate can seem impossible at times. We believe in being transparent and giving our customers all the information they will need before deciding to develop their App.
The actual cost of App development will finally come down to what your requirements are. Here is a breakdown of the primary factors which will determine what an App will cost to develop.
Labor cost and development period
A simple App can take about 16 weeks to develop, whereas a complex one may take 12 months. The longer it takes to build your app, the more expensive it is going to become. Your developers can charge you based on the time frame of development with either a fixed contract or a flexible one.
A fixed contract is one where the development cost is agreed upon before the development process starts. It is more suitable for simpler apps and smaller projects which have a well-defined scope of work.
The app development cost is usually calculated by multiplying the engineer’s labour cost by the time it will take to develop the App. The development period depends on the features required in the App and any other specific development requirements.
For example, let’s consider that you approach an App developer based in America. You need to consider the monthly unit price of one system engineer. A talented iOS app developer in San Francisco (mainly due to very high living costs) could earn a salary of around $120,000 - $140,000 per year, and you will need to put together an entire team to complete the whole project.
A flexible contract is one where the price is calculated based on an hourly rate with a pricing structure that is determined by the complexity of the app and the materials needed for the project. This approach is more suitable for ongoing and complex projects as it provides more flexibility.
Some other factors that will dictate the App development cost are:
• If you decide to design/program the App in-house or outsource it.
• If you build a Native App vs if you build a Hybrid App.
• The running costs such as bug fixes, function additions, and server maintenance after the application is completed at the planning stage.
App development cost by App Genere and App function
Here, we will introduce the rough market price of development costs from the viewpoint of application genre and function.
Development costs by App genre
Some genres of App cost more than others; this is mostly due to the design and feature requirements that the genre has. Here are some market estimates of production costs for each major app genre (compatible with iOS / Android).
Media apps from $23,600
Store-based apps from $56,800
Financial apps from $94,600
EC application (with data pace linkage) from $142,000
Development cost by application function
App functions are one of the most significant factors in determining the cost of App development. You can often get developers to build an MVP(Minimum viable product) App with the minimum features that you deem necessary and then add more features as and when you have the funds to do so.
Simple camera, clock, calculator, etc. $14,200
Login function, SMS cooperation $28,400
Addition of SNS function $20,800 to $108,800
In order to add the SNS function, it is necessary to implement real-time online chat and share functions in addition to processing a large amount of data, which increases the production cost.
In-demand service apps (Uber, UberEats, etc.) $47,000-90,000
Since it is necessary to incorporate various systems such as authentication function, online chat, and online shopping function to provide on-demand service, the development period tends to be longer, and the development cost can end up being more than this estimate.
Most apps require maintenance and operation costs, in addition to the initial development costs. Maintenance/operation means updating work, such as adding new functions or fixing bugs to an app once released. The industry norm for software maintenance is about 10% to 20% of the original development costs per annum.
So if your App costs $50,000 to develop, you are roughly looking at $5,000 to $10,000 an annum as operating costs.
If there are many bugs and fixes, it can cost thousands of dollars apart from the initial estimate. Especially in the case of smartphone apps, it can cost a lot of money if the app needs to be updated when the terminal OS is updated.
It's easy for clients to forget about running costs after release, and it's difficult to estimate without app-related expertise.
App creation tool
In recent years, the use of assist tools that make it easy to create apps at low cost by simply selecting the functions to be implemented in the app from the template is increasing.
The app creation tool is effective when creating things with low planning and development costs, such as making point cards online and making homepage apps. One of the strengths of production tools is that even companies that do not specialize in programming can easily develop in-house.
While this is the cheapest way to develop an App, the App that you will get will have very limited application and can mostly be used for very basic functions.
Cost of communication in App Development
A gap in expectations and delivery of the App can result in a steep rise in the final cost of the App. Suppose the content of the App request by the client is abstract. In that case, it is difficult for the developer to estimate the features needed, making it difficult to calculate an accurate development cost. Especially when planning and designing are outsourced, the cost will increase in proportion to the development period.
In order to optimize the development cost, the client is required to prepare a request form that specifically describes the purpose of use of the application, the function of each screen, the site map, etc. By clearly showing the image after completion, engineers can easily predict the work period and correctly understand the functions to be implemented. As a result, the client can obtain two benefits: extra development cost reduction and shortened development period.
Consider revenue sharing
Revenue sharing is a method in which the client and the production company share the application development and operation costs, and the profits from the deliverables are also shared. It is becoming a versatile method in the web-related industry in recent years.
Since the production cost is shared by the two companies, it is easier to carry out large-scale projects with massive budgets.
Ask an individual
When requesting an individual (freelancer) to develop an application, you may be able to place an order at a lower price than requesting a production company. The actual production cost depends on the skill of the engineer, but there are quite a few engineers who have a track record in freelance. Individual engineers often post their work and profiles on their websites, so it may be possible to determine their skills and areas of expertise from their work.
The biggest downside of this is that you do not have a company to go back to if something does not go as planned, an individual can disappear, an established company cannot.