App Development Costs: Understand Your Budget to Build Your App
The number one question when starting app development is; “How much is this going to cost?”.
How much should you invest at the beginning to build an awesome application and then scale it to a business worth billions?
We have analysed some key mobile application industry studies and succinctly created this article of findings and included our best practices regarding mobile application development.
This guide will help you to understand the application development cost formation. You will be able to effectively manage your application development budget, reduce application costs, and pay attention to mobile application cost drivers upfront.
Application Development Cost: Benchmarks
It makes a lot of sense to launch an app startup these days. The vast majority of the population utilise different mobile applications as part of their daily activities. That’s why working with experienced mobile marketing specialists and excellent app developers like XAM Consulting can be the best way to ensure that your strategy is designed to succeed.
However, what is the cost to implement a mobile application these days?
The most reliable mobile application industry studies provided the following quotations for app development cost and timeline:
- The median app development cost is around £257,175 (at a rate of £225/hour), which represents 1,143 development hours. The total app price could even increase to £1,091,250 in the case of complex functionality implementation (Clutch Survey, 2015)
- Average minimum app development project is between £7,5000 to £15,000. The typical cost to create an app is likely to be far higher (Clutch Survey, 2017)
- Enterprise mobile app development cost is an average of £210,000 (VDC Research, 2017)
- Available app cost calculators state a price range from £400,000 to £540,000 for complex, multi-feature mobile apps
- Regarding the app development timeline: over 80% of mobile apps take 3+ months to develop; 40% of apps are built in 6+ months (Outsystems Survey, 2018-19)
Basically, your app idea, along with business and functional necessities, influences the app development cost.
The most influential factors which determine the final cost to build an app are:
- Vendor type and location
- Complexity and the number of features
- Back-end infrastructure and connected APIs
- Complexity of UX/UI design
- Inclusion of additional branded visual elements
- Development approach (native, mobile web, hybrid, etc)
- Number of platforms to be developed (iOS, Android, web, etc)
Mobile App Development Cost in 2020
The question is still open. How much does it cost to build an app in 2020?
The key findings suggest that the cost to develop an app ranges from just £7,000 to £750,000 based on up-to-date industry surveys.
Our team has also created a detailed investigation on the cost to build an app that lists estimates based on widely used app features, design complexity, and software development stages.
As a result, our conclusion supports the main findings regarding the cost to develop an app in 2020. An application with a core set of features costs upwards of £50,000, while the complex mobile app development cost starts at £245,000.
The table below illustrates the range of costs to build an app with timeline accordingly.
Cost to Develop an App: Understanding the Basics
The following elements should help you understand the app development cost, so you are able to influence the price range and set your project’s budget.
- Native vs. hybrid app
The app development approach definitely influences the final cost to build an app.
An application that suits the guidelines of a specific operating system is called native. Thus, you can only build a native app for each system separately. Logically, the app development price increases in proportion to the number of platforms you want to target.
In contrast, a hybrid or cross-platform app works with multiple operating systems, which means that you can save money by building only one application for all required platforms.
However, due to the technical superiority and performance of native apps, the vast majority of app development companies recommend this approach.
- Android vs. iOS app
You may also ask if there is any difference in app development cost based on the platform. The answer is no.
These days, the app development timeline for Android and iOS apps is almost the same. If you target both platforms, your applications can be built simultaneously, which allows the apps to be launched at the same time.
- Misconceptions about the mobile app development process
The two most common delusions within app development are as follows:
1. You expect your app business to become another “Uber”
The majority of digital startuppers expect good outcomes right away. Many of the requests we receive sound like: “build an app like Uber” or “I want to develop an app like Instagram.”
You would surely agree that these app-based companies have evolved over the long term. Besides, just consider the fact that Instagram received $57.5M in investments for application development in order to become successful.
So, if you want another Uber or Instagram – expect to pay!
Advice: Instead of duplicating someone’s success, it is important to concentrate on bringing something new to the market. These days, you need to build habit-forming app products.
2. You can succeed without proper market research
It is highly necessary to evaluate the market and complete the pre-planning stage for your app concept. Do your homework carefully: study the market and find its pain points that your app idea can solve.
- Reasons behind expensive app development
Airplanes and cars are both types of transportation, but they are different by all means. The same can be said about software. The cost to develop an app like Uber differs significantly from the cost of an app like Today Weather, which simply uses third-party API.
Why people have a tendency to devalue software?
This confusion exists due to the following three factors:
- Apps are intangible – as opposed to hardware, software products are seen as screens. In order to show this information, all the hard work is done in the background. An analysis of Kickstarter campaigns derives that hardware projects receive more funding as opposed to software ideas. It is suspected that hardware remains more noticeable, while software is out of sight and, therefore, unappreciated.
- Immeasurable intellectual capital value – the creativity and thoughtfulness involved at the project’s start is hard to measure. Usually, a cross-disciplinary team is involved to ensure all the app details and processes are covered. Clients do not see the result of this work since it does not result in any tangible deliverables, just an app concept. Therefore, many people become confused by the final app price tag for this service.
- Non-obvious benefits – some prefer elegant, simple, and intuitive products, while others search for more power and speed in their apps. This can be compared to Mac users and those who have never understood the benefits provided by Apple’s devices.
How is App Development Cost Estimated?
How can you accurately estimate the cost of mobile app development?
The main app cost driver is the app’s features.
A feature is a special activity or task according to which the software should operate and give the expected result. This can be a sign-up button on a screen or something more complex like video-streaming integration. The number of features and complexity of their implementation directly correlates with the cost to build an app.
The formula used to calculate app development cost is as follows:
Before app development begins, reliable software development firms usually provide you with a rough mobile app development cost estimate. The quote is based on your project description, business and technical requirements. This information is combined and concluded in a preliminary list of features.
Companies usually estimate app development cost using:
- Concepts – present a sum of features to accomplish
- Stories – list all the features necessary to make a concept
- Story Points – show the app development pace and complexity
These items are presented in the form of a product backlog.
A product backlog is a list of the features, changes to existing features, bug fixes, infrastructure changes, or other activities that a team may deliver in order to achieve a specific outcome.
In general, clients are charged for app development services based on the following options:
- Fixed charge – a payment which implies the cost charged for a specific timeline. This may work well for smaller projects, especially those with a clear and well-defined scope of work. The advantage of this option is that the app development cost is affirmed with the client before development starts.
- Time & material – a pricing structure that is determined by the time and materials needed for a project and thus is typically calculated based on an hourly rate. This approach provides flexibility during the app development process and fits more complex and ongoing projects.
It is necessary to understand the benefits of applying the time & material option, even though you may be anxious about it in the beginning. As this option has both an initial project estimate and the ability to change the scope during the process, this helps to control the app budget and, with this flexibility, build a product people will love.
The latter is actually your core goal, isn’t it? 🙂
Why initial mobile app development cost estimates are not always met?
Basically, there are two reasons why the estimated app development cost does not end up matching reality:
- Unfaithful app quotes are provided by a software firm of low service quality. Some companies do not pay enough attention in the preparation of a good-faith estimate or are dishonest and simply want to sign the contract. Usually, these are bodyshop teams.
- Increase in app development scope due to changes along the way.
If your budget is limited for the first app version, you have three options:
- Agree on specific features – set them upfront and stick to the plan. If you follow this rule, you will keep the same scope of work and the app development costs will stay the same as well.
- Pay additional costs – with extra app functionality, be prepared for the fact that your cost to build an app will increase.
- Drop functionality – along with your development team, you can prioritise app functionality. In this case, you may rearrange the scope of work so that it will contain necessary features and fit budget constraints. Reach a compromise so that your cost to develop an app stays at the same level.
Cost to Build an App Based on Development Stages
In most cases, the mobile app development process consists of these five stages:
- Pre-development (also called – discovery or research)
- UX/UI design
- App development
- App testing and deployment
- Ongoing support and maintenance
Note: Depending on the app vendor these steps can be renamed, take place in another order, or imply a slightly different format.
The majority of software development vendors (~ 70%) start a project with the pre-research/ discovery stage(Source: Clutch.co, 2017).
Our team is not an exception, since this step allows the team to clarify all the ins and outs of the app from both technical and business perspectives.
A common understanding and trust are formed with a client and software development vendor through personal meetings.
Discovery stage provides the following benefits:
- Time and cost savings
- Requirements validation
- Goal-based design solution
- Risk coverage
- Synchronization of the Product Owner (client) with the team
- App project task prioritization
The biggest benefit you receive after the discovery stage is an exact answer to the question: “how much does it cost to make an app for your business?” An accurate app development budget and delivery date are calculated based on user stories presented in the product backlog.
Once the discovery stage starts, a cross-functional team is allocated to the project. The team may consist of a Business Analyst, Software Architect, Designers, etc.
Among other possible Discovery Stage deliverables are:
- Finalized project concept
- UX/UI design
- Product backlog
- Project architecture plan
- Market & Competitor analysis (optional)
The average cost of the discovery stage ranges from £15,000 to £25,000 with a timeline of 2-4 weeks. These costs and timeline relate to an average app project lasting 4-6 months.
The subsequent app development stages use the deliverables derived from the discovery phase. Depending on the project, the team may proceed directly with the app coding phase or finalise the app design.
It is necessary to have a visual representation of the app prior to the actual app coding. Surveys summarise that the app design costs around £7,500 for an average of 11-20 app screens. Thus, the price for app design correlates with the number of screens, design complexity, and the use of any sort of custom visual elements.
Similarly, the number of features and their complexity, as well as the app concept and type influence the cost of an app during the development stage. Ordinary features like user login/logout, push notifications, in-app search by one entity type, and basic one-to-one chat cost less. The functionality connected with the content management system (admin panel), video and audio streaming, is complex and thus more expensive.
The app testing stage ensures proper app function and quality. Logically, the cost for app testing is directly connected to the app functionality. In practice, app testing takes up around 30% of the app cost spent on client side (front-end) implementation. The front-end part of an admin panel costs less; around 10%.
The graph illustrates the average app development cost during each stage based on data collected from 102 app development firms. Each development stage adds up to the total mobile app cost.
Want to know your initial app development budget?
At AutomationSquared, we can estimate your project roughly to give you a general idea of the potential cost of your app. Interested?
Mobile App Development Cost Based on 8 App Types
Please note: the following app development costs are given to build a common understanding. As well, some app types may have similar functionality.
Remember: each and every project is unique, since no one has the same requirements, business context, technologies, and people involved.
1. The most basic app development cost
- App Cost: > £17,500
- Timeline: 1 month
- Examples: Calculator, Camera, Clock, Local games, SMS apps, Local audio/ video players
Basic apps are simple apps with 5-6 screens and no backend or necessity for a network connection. These apps are not that common today. There should be a clear purpose to develop this type of app. These days, most apps need to operate with the Internet, as people consume lots of information online.
2. Data-driven app development cost
- App Cost: £17,500+
- Timeline: 1-1.5 months
- Examples: Calendar, Weather, Stocks, Maps
Data-driven apps are defined as those that consume and process only specific information. For instance, Today Weather app uses third-party API information.
These apps are also not that common today, but they still exist. In most cases, these apps are either the extension of a larger software product or include additional features.
Other examples of apps in this category are calendar or stock apps. Note that these apps may need some back-end work, and so the cost to build an app increases.
3. Authentication app development cost
- App Cost: starting from £75,000+
- Timeline: 3-5 months
- Examples: McDonald’s Loyalty App, Google Drive
Authentication apps need a user to log in to provide full app functionality. The app development cost for this type increases since there are many subordinate features. Here, the user has a personal account and interacts with the data, which is synchronised among devices. This also requires a corresponding admin panel for content and user management.
It is advisable to employ registration via social networks (Facebook, Twitter, etc). This is a one-step procedure that is quicker to implement. Our team has vast experience in developing apps with login functionality.
4. Social networking app development cost
- App Cost: £75,000 – £360,000+
- Timeline: 3-5 to up to 9+ months for ongoing project
- Examples: Instagram, Facebook, LinkedIn, Yummi
Logically, social networking apps imply social interactions, chats, and information sharing. Therefore, the back-end infrastructure should be planned with the intent to process lots of data.
There are also many subdued types of social apps like media sharing, apps for consumer reviews, communities, blogs, anonymous and interest-based networks, dating apps, etc.
Making a clone of the most widely used social products like Instagram, Facebook, or YouTube does not lead to greater success. These products have existed for years now and your social app simply cannot include all of their functionality. All of them started from either an MVP or a first basic version with their core features.
For example, in the beginning, Instagram was an app working with photos – adhering a photo into a square. This is known as the Instagram MVP, the key functionality which allowed Instagram to succeed in the app business. Building the first version of your future custom full product is a great approach to begin any project. You can easily Buy youtube views to attract more customers to your business.
5. E-Commerce app development cost
- App Cost: £75,000 – £360,000+
- Timeline: 3-5 to up to 9+ months for ongoing project
- Examples: Amazon, eBay, Alibaba, ASOS, GoPuff
E-Commerce apps include the functionality mentioned earlier: user registration, user account, social features. These apps are equipped with detailed product catalogs, separate product pages, and a user check-out system completed via payment transaction. For the payments, services like Braintree and Stripe are great to integrate.
The e-commerce app infrastructure is a complex one, as it requires a well-planned back-end and admin panel to manage users, orders, catalog pages, payments, inventory, etc.
As a result, app development cost rises along with the development timeline. It is necessary to build two separate applications with their own logic, UX/UI design, and functionality. This is especially true if you plan to launch this type of app on both iOS and Android.
7. Marketplace app development cost
- App Cost: £360,000+ (web platform)
- Timeline: 9+ months
- Examples: TripAdvisor, Booking.com
A marketplace app includes features from both e-commerce and on-demand services, as it is an extensive version of these apps. The marketplace app concept has two sides of the economy – demand and supply. The logic and interaction in user experience should be well-defined. This process takes time, so the cost to develop an app of this type is higher.
For instance, Uber focuses solely on transportation services. In contrast, TripAdvisor offers hotels, restaurants, airline tickets, and more services with the help of a website and native iOS and Android applications.
8. IoT & Hardware app development cost
- App Cost: starting at £75,000+
- Timeline: from 3-5 months
- Examples: Beacons, Amazon Dash Buttons, WeMo, BELI Printing Service, Jo
Internet-of-Things apps interconnect particular physical objects or equipment with technology. Once the IoT technology is applied, these items are considered ‘smart.’ These ‘smart’ items could be medical tools, pet collars, devices for home assistance, and so on.
These apps need to connect with a device either via Bluetooth or WiFi technology. This helps to send requests and receive data.
In order to develop this kind of app, it is necessary to have a ready-made device and its comprehensive documentation. The hardware should work properly and in accordance with the documentation. It is then possible to estimate the cost to develop an app, at least roughly.
In the past, our team has worked on a few projects connected with hardware.
- BELI Printing Service – an app that prints order receipts directly to a printer on location with a merchant.
- Jo – an app that records video from a panoramic camera and converts it into a horizontal picture.
In conclusion, the following table summarises the key approximate app development cost and timeline information for each particular app type.
10 Hidden App Development Cost Drivers
The process of app evolution can be separated into the following phases:
- Phase 1: Development of the first app version. This milestone includes design creation, coding the feature, quality assurance, etc. As well, the app architecture is organized for subsequent project versions including components such as hosting, proper server capabilities, databases, different supporting libraries, etc.
- Phase 2: Ongoing app development. This phase refers to the necessary app updates, implementation of new features, app maintenance, bug fixes, and more.
Some of the elements, especially those that fall into the app architecture and ongoing development categories, can sometimes be undervalued or simply hidden from the client’s eye. This may cause confusion among clients, as these parts impact the cost to build an app noticeably.
Below is a list of elements that have some of the biggest influence on app cost:
- App infrastructure services (servers, hosting, domains)
- Assembling the app architecture: monolithic vs. microservices architecture (the latter uses more technical resources, but is also more efficient in the long run)
- Databases used for data storage (user data, photo and video content, etc.)
- Assembling back-end infrastructure (especially for further app scalability)
- API and third-party service integration (e.g. payments, maps, analytics, etc.)
- App administration (complex web portals or CMS for app management)
- Development tools and libraries used
- Data encryption to transfer data
- Regular app updates and bug fixes
- Video or audio streaming functionality
Please also take into account: Software development vendors estimate the current costs to build an app, which exclude support and app maintenance costs.
If you are planning to build a great app product, you should consider the ongoing app development cost you will have to handle.
The cost to maintain and support an app is considerably higher than the budget spent on original app development.
So, how much does it cost to maintain an app?
Recent studies regarding the ongoing app development cost state:
- Typical mobile app development equates to around 35% of the total budget spent over the next two years (Computerworld, 2012)
- After the app launch, expect that further support and app maintenance costs will be around £5,000 – £10,000 annually (Clutch Survey, 2017)
- Around 50% of the app development cost will be spent on maintenance during the first year, 25% in the second, and 15%-25% each subsequent year (Outsystems Survey, 2018-19)
Thus, it makes sense to set two different mobile app development budgets; one for the first working product version, and another for app’s further support and ongoing development.
Conclusion: How to Build Your App on a Budget
We assume you now have an idea of some approximate app development costs. Here is a list summarizing how it is possible to stick to the initial app budget, as well as a couple helpful recommendations.
1. Do your homework. Note the app requirements (technologies, platform(s)) and conduct your own market research for an app idea, solution, and target audience.
2. Choose the right app development team. Select a vendor who is experienced in your niche, has worked with well-known brands, and has a substantial portfolio.
These vendors are likely to work on minimizing the app development costs and timeline, and:
- build and work on their own open-source libraries and use them in app development (while not breaking licenses rights).
- use their own best practices and ready-made solutions for the intended functionality (e.g. user registration, chats) to save time for regular operations
- apply only proven and working libraries and third-party services with enough documentation
- utilise effective project management processes and tools inside the company
- apply just the right technologies and development tools to achieve the necessary results
3. Take into account hourly development rates. Outsourcing to Eastern Europe (e.g. Ukraine) can be perceived as cost effective, but has inherent risks.
4. Start small. Beginning the development of the first app version with a focus on “must have” features that drive revenue is a good way to start growing your project. Invest in further features after.
5. Use simple app design. Apply concise and intuitive app design for the first app version.
6. Monitor and be involved in the process as a Product Owner. Your feedback is highly valuable to the team and only through a combined effort can you achieve greater results.
7. Planning is key. Even though it may not have a single line of code, the app discovery stage is one of the keystones. Never undervalue this phase because it is worth the initial investment.
8. Receive a detailed project estimate. Just after the discovery stage, you should receive the core project materials and the rough app estimate should become exact.
9. Stick to the app scope. Otherwise, be prepared to pay extra or reorganize the work with your app development vendor.
Let’s summarize the results of our app development cost analysis:
- App development cost per platform ranges from approximately £15,500 to £360,000+.
- Industry studies present the cost to build an app from £7,500 to £750,000+. This supports the fact that the app development cost is hard to predict upfront.
- App development cost is based on factors like app development vendor, number and complexity of features, design, development approach, and platform(s).
- Accordingly, the timeline to build an app varies anywhere from 1 to 9+ (ongoing project) months.
- It is highly valuable to complete the Discovery stage. The stage price for the first app version is around £17,000 – £22,500 from the app development cost. The deliverables are a finalised app concept, product backlog listing app functionality, app design, and architecture plan. As well, an accurate app development budget is specified.