Everything you ever wanted to know about app development costs but were too afraid to ask…
Type “How much does it cost to make an app?” into Google and you get 2,700,000,000 results. (Answers range from a couple of thousand dollars to $1 million!) One thing’s for sure: App development isn’t always cheap, but it does provide you with a return on investment.
What you need to know:
- It costs around $10,000 to build a basic app, but this is a very rough estimate.
- The design and features you choose will increase the cost of app development.
- The person you choose to develop your app can also increase the cost.
- Marketing, quality assurance, and maintenance will increase the cost even further.
This guide will tell you how much it costs to create an app and the factors that influence these costs. By the end, you’ll have a much better understanding of how much your app will cost in 2020.
What Does the Research Say?
There are various studies that determined the true cost of app development:
- In 2017, one study surveyed 102 app development companies worldwide to find out the average cost of developing an app. The average cost was $5,000-10,000.
- Another study suggests it costs $10,000-50,000 to develop a basic app.
- In another study, companies said they spend, on average, $140,000 to build and deploy a mobile app.
As you can see, there’s no definitive answer to how much app development will cost and the results vary considerably, so we need to explore this topic a little deeper. But first, let’s explain why you need an app in the first place.
Why Do You Need an App?
All of the world’s biggest brands have apps, and it’s something that could revolutionize the way you do business. Apps serve multiple purposes, including the following:
- Apps increase accessibility to products and services.
- Apps improve customer experience.
- Apps engage customers throughout the retail lifecycle.
- Apps move customers through your marketing and sales pipelines.
- Apps improve customer loyalty.
With a custom app, you can sell products and services, communicate with customers, and increase visibility all at the same time. All you need is an app developer (or “vendor”) who can turn your idea into a reality.
Apps cost an initial outlay, but they could save you money in the long run. With a good app, you will be able to build brand awareness, facilitate payments, and improve customer service.
Here are some facts that prove the true power of apps:
- Experts predict that apps will generate $189 billion in revenue by the end of the year 2020.
- After shopping online, 42 percent of customers use a shopping or communications app.
- 18-24-year-olds spend 66 percent of digital media time using apps.
- Mobile users spend 87 percent of their time on apps, compared to just 13 percent on the internet.
During the current pandemic, app downloads are at an all-time high as many companies move services to the digital sphere. If you have always wanted to invest in an app, now’s a better time than ever. Even if your brick-and-mortar store is closed, you can still sell products and communicate with customers through your custom app.
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What is App Development?
“App development is the creation of software intended to run on mobile devices and optimized to take advantage of those product’s unique features and hardware. The types of mobile apps that developers create include native apps, hybrid apps, and HTML5 apps.” — Business News Daily
“Application development is the process of creating a computer program or a set of programs to perform the different tasks that a business requires.” — Zoho
In other words, app development is the process of developing a custom-made app for your business. There are many stages of app development, and some of these stages take longer than you think.
How Long Does App Development Take?
App development times vary, but you can expect the following timescales in most cases.
- Business analysis: This is when IT vendors come up with the look, features, and design of your app based on your requirements and budget. This stage can take 2-3 weeks.
- UX design: When vendors define how your app will “feel.” They will work on the usability, functionality, and interactive features that provide users with a good experience. This can take 2-3 weeks.
- Back-end and front-end development: The technical bit! This is when vendors convert data into graphical interfaces using language scripts so users can interact with this data. Back-end and front-end development can take 6-8 weeks or longer.
- Testing: When vendors test your app to make sure it works properly. This can take a few weeks.
It’s important to note that not all vendors follow the above timeline, and it can take considerably quicker or longer to develop your app.
Who are App Development Vendors?
At this point, it’s important to mention that there are two types of IT vendors who create apps for businesses like yours:
- Freelance app developers
- App development agencies
Alternatively, you can hire your own in-house team of designers and developers.
Freelancers work independently and might develop the whole of your app or just a few services. This means you might need to hire several freelancers to make your app just the way you want it. Working with a freelancer, however, means you can communicate with the person who is developing your app directly. There’s no “middle man.”
App development agencies, however, provide you with a wide range of services. Agencies will take care of app development from the initial stages right through to launch, so you don’t have to find several freelancers. This means less paperwork.
Whether you choose a freelancer or agency is up to you. Here are some of the things you should consider:
- Working with an agency typically works out more expensive than working with a freelancer (but not all the time).
- Agencies take care of all aspects of app development.
- You can communicate directly with freelancers.
- Agencies tend to be more accountable than freelancers, although this isn’t always the case.
There is a third option. You can hire designers and developers to work in-house and create an app for you. These professionals do the same thing as freelancers. However, they will do their work from your place of business. This means you will need to hire them on a contractual basis and cover the usual costs associated with hiring an employee, such as onboarding and healthcare insurance. As a result, in-house designers and developers can cost more than freelancers and agencies.
Factors That Influence the Cost of App Development
There are many different factors that influence the cost of building an app. These include:
- Complexity of the design
- Number of features
- Platforms where you’ll release your app —Android, iOS, web, etc.
- Vendor’s fees
- Vendor’s location
Complexity of the Design
The more complex your design, the longer app development takes. A basic app can take around 300 hours or so to create, but more advanced, multi-faceted apps can take three times that amount of time — around 900 hours.
Generally speaking, app development goes through several stages, and each of these stages will take longer if you require a more complex design.
It goes something like this:
- Vendors work with you to design an app based on your business requirements.
- Vendors use wireframe creation (prototypes) to plan the ideas and features you want to implement in your app. This can take longer if you require advanced features, such as games and maps.
- Vendors will define the back-end structure of your app, integrate data, and customize the user experience. The more complex the back-end structure, the longer it will take.
- Vendors will define the front-end structure of your app and make any UI changes. The more complex the front-end structure, the longer this process.
- Vendors will test and deploy the app. If you require quality assurance, expect this process to take longer.
Let’s use an example. Facebook is one of the world’s most-used apps for communication and information sharing. However, it is relatively complex in design. It includes features such as images, videos, payment integrations, messaging, push notifications, and more.
Although it’s hard to predict how much Facebook’s app cost to make, experts believe that the most complicated and time-consuming features are the news feed, live chat, and video call capabilities. The news feed alone could have taken around 450 hours to develop.
In total, it could have taken vendors more than 3,000 hours to create Facebook’s app. This could have cost the company around $360,000-405,000!
Number of Features
The features you want will drive up the cost of your app. There are far too many features to list here, but some include:
- Payment integrations
- User logins
- Video streaming
- Data encryption
- Animation
- Live chat
- Customizations
The reason some features cost more than others is because they take longer to develop. Vendors will charge you more money the longer app development takes.
Prices might also differ depending on whether you want a native app or a web app. Native apps are designed for particular mobile devices, while web apps run in a web browser (Firefox, Chrome, etc.)
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Platforms
As a general rule, Android apps cost slightly more to develop than iOS apps. However, this all depends on the features you want to implement. Android apps can cost more because they require more code than iOS, which takes vendors longer to complete.
You should also realize that some vendors will charge you to develop both an Android and iOS app at the same time. Creating an app for each of these platforms requires different back-end development and coding requirements.
Seventy-five percent of app development companies frequently develop iOS native apps, while 61 percent develop Android native apps.
Vendor’s Fees
The vendor will carry out all the tasks associated with app development, which might include:
- Design
- Back-end development
- Front-end development
- Project management
- Testing
- Quality assurance
The total cost of app development will vary depending on the location (more on that later) and the experience of the vendor.
Typically, an advanced vendor in the US can charge around $120-140 per hour. Someone with less experience will charge significantly less. You might be able to save money if you develop several apps with the same vendor. Some vendors charge nonprofits and governments less money for app development.
Vendor’s Location
The location of the vendor can have a significant impact on the cost of app development. In simple terms, vendors in some countries charge more for their services. Recently, Software World ranked the top mobile app development companies in the world. Eight out of the top 10 companies are based in the United States; one is located in Belarus; and one in India. The majority of the world’s apps are developed in the U.S. and Europe. However, the number of app developers in Latin America and Asia has skyrocketed in recent years.
Research into the median cost of app development in various regions reveals the average cost of app development in:
- The U.S. is $168 an hour for an Android app and $150 an hour for an iOS app.
- The United Kingdom is $70 an hour for both an Android app and an iOS app.
- Eastern Europe is $35 an hour for both an Android app and an iOS app.
- Latin America is $34 an hour for an Android app and $43 an hour for an iOS app.
- India is $26 an hour for an Android app and $30 an hour for an iOS app.
As you can see, there are significant price differences depending on the location of the vendor, so you should take this into account when budgeting for app development.
Why You Should Be Realistic
App development can cost hundreds of thousands of dollars, depending on the factors listed above. This can cut into your overall business development budget, so it’s important to be realistic about what you can afford.
You might have a long list of features that you want to incorporate into your app, but this might not be possible if you have a limited budget. It’s important to prioritize the features that bring customers the most value and incorporate other features into your app at a later date.
Although this might be disappointing, you can always scale your app as your business expands. Even multinational companies like Uber started with a very basic design and few features. As the company expanded, its app became more complex and offered users more flexibility and capabilities.
Other Costs
There are other costs that you should know about. Vendors can market your app on social media and websites, and this will increase the cost of app development considerably.
It also costs money to list your app on the App Store and Google Play. Currently, it costs $99 a year to list a single app on the App Store and a $25 registration fee to list apps on Google Play.
You will also need to factor in the cost of app maintenance. Vendors might charge you for the following:
- Upgrading your app to the latest iOS/Android version
- Upgrading your app with new technologies
- Adding new app features
- Fixing technical issues (“bugs”)
- Improving the stability of your app
All of these services cost additional money, but they will improve the user experience and make sure your app works properly. Think of an app like a vehicle that needs regular maintenance.
Again, app maintenance costs vary depending on the vendor you use and the complexity of your app. However, it usually costs around 20 percent of the total cost of your app every year. For example, if your app costs $100,000 to develop, you can expect to pay around $20,000 a year in maintenance. For more than half of companies — 56 percent, in total — it costs around $10,000 or less to a year to maintain an app.
Other costs include server hosting, which ranges from $70-320 per month, and registering and using a domain name, which ranges from $10-15 per year.
How Do You Pay?
There are various ways you can pay for app development:
Fundraising
Many startups raise funds from investors to cover the cost of their app. This is what companies like Uber did. To date, Uber has generated more than $26 billion from over 25 fundraising rounds. One company, SoftBank Vision Fund, invested $9.3 billion into Uber.
Business loans
Other companies raise the funds for app development through business loans or other types of finance. They hope to pay back these loans once their app is up and running and their business starts to generate a profit.
Pay up-front or on completion?
How you pay for app development depends on the people you work with. If you use an agency, for example, you might be expected to pay for their services up-front or over several months until project completion. You might then pay for maintenance costs on a monthly, quarterly, or annual basis.
If you work with freelancers, they might invoice you on the completion of the project. However, you might be expected to pay a deposit up-front.
If you work with in-house designers and developers, you will usually pay them in the same way as your other staff. This could be every 2 weeks or every month. You will also be responsible for taxes and other costs such as healthcare and workers compensation.
How Much Did Some Famous Apps Cost?
Although it’s difficult to know how much apps cost to develop, we can make some predictions.
Let’s take Airbnb as our first example. This advanced app has many features, such as log-in, search, chat, profiles, and payments. Some of these features are relatively simple to develop; others take more time. Features such as chat and search, for example, can take more than 120 hours to develop. With this in mind, one app development company estimates it took around 389 hours to develop an app like Airbnb. However, we believe that this is significantly higher because doesn’t include the backend programming, testing, and quality assurance.
If you hired an agency in Ukraine to develop an app like Airbnb for you, it would cost around $30,000 for iOS and a further $30,000 for Android. This price would be significantly higher if you hired an agency in the US or UK, however the quality may be better.
What about Instagram? Like Airbnb, this app has any advanced features such as private messaging. However, one company estimates app development would cost up to $14,000 for each platform (iOS/Android).
Final Word
As you can see, estimating app development costs is like asking, “How long is a piece of string?” The answer: It all depends. As a general rule, a basic, simple app can cost around $10,000 or so, but there are various factors that will increase these costs significantly, such as the location of the vendor and the complexity of the design.
How much to make an app in 2020? Let us do all the calculations for you. Click here to schedule a discovery call and we’ll provide you with an accurate quote
