How much should you invest in the beginning to build an awesome app and then scale it to a business worth billions?
Our team has analyzed some key mobile app industry studies. Here, we created a compound article of recent findings and have included our practices regarding app development.
Benchmarks in Mobile App Development
It makes a lot of sense to launch an app startup these days based on the data below.
The most reliable mobile app industry studies provided the following information:
- The median app cost is around $171,450 (at a rate of $150/hour), which represents 1,143 development hours. The total app price could even increase to $727,500 in the case of complex functionality(Clutch Survey, 2015)
- An average minimum app development project is between $5,000 to $10,000. The typical cost to create an app is likely to be far higher (Clutch Survey, 2017)
- Enterprise mobile app development costs $140,000 on average (VDC Research, 2017)
- Available app cost calculators state a price range from $267,000 to $360,000 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)
The most influential factors which determine the final app cost are:
- Vendor type and location
- Complexity and the number of app 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 2019
The key findings suggest that the app cost ranges from just $5,000 to $500,000 based on up-to-date industry surveys.
As a result, our conclusion supports the main findings in 2019. An application with a minimum set of features costs upwards of $22,000, while the complex mobile app development cost starts at $110,000.
The table below illustrates the costs and timeline range to build an app.
- Native vs. hybrid app
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.
- Misconceptions about the app development process
- You expect your app business to become another “Uber”
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
- Reasons behind expensive app development
Why people have a tendency to devalue software? This confusion exists due to the following three factors:
- Apps are intangible
- Immeasurable intellectual capital value
- Non-obvious benefits
How is App Cost Estimated?
How can you accurately estimate the cost of mobile app development?
The main cost driver is the app’s features.
The formula used to calculate the development cost of application is as follows:
Companies usually estimate app development 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
In general, clients are charged for app development services based on the following options:
- Fixed charge
- Time & material
Advice: It is necessary to understand the benefits of applying the time & material option. 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.
Why initial mobile app development estimates are not always met?
Basically, there are two reasons:
- Unfaithful app quotes are provided by a software firm of low service quality
- 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
- Pay additional costs
- Drop functionality
App Cost Based on Development Stages
In most cases, the 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).
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.
Among other possible Discovery Stage deliverables are:
- Finalized project concept
- UX/UI design
- Product backlog
- Project architecture plan
- Market & Competitor analysis (optional)
The average price of app development during the discovery stage ranges from $10,000 to $15,000 with a timeline of 2–4 weeks. These costs and timeline relate to an average app project lasting 3–5 months. Hence, the discovery app price corresponds to ~30% of the total app cost.
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 app cost.
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. Basic app
- Cost: > ~$15,000
- Timeline: ~1 month
- Examples: Calculator, Camera, Clock, Local games, SMS apps, Local audio/ video players
2. Data-driven app
- Cost: ~$15,000+
- Timeline: ~1–1.5 months
- Examples: Calendar, Weather, Stocks, Maps
3. Authentication app
- Cost: ~$30,000+
- Timeline: ~2–3 months
- Examples: McDonald’s Loyalty App, Google Drive
4. Social networking app
- Cost: ~$22,000 — $115,000+
- Timeline: ~2–4 to up to 8+ months for ongoing project
- Examples: Instagram, Facebook, LinkedIn, Yummi
5. E-Commerce app
- Cost: ~$35,000 — $170,000+
- Timeline: ~2–4 to up to 12+ months for ongoing project
- Examples: Amazon, eBay, Alibaba, ASOS, GoPuff
6. On-demand app
- Cost: ~ from $50,000–60,000+ (per platform)
- Timeline: ~5–7+ months
- Examples: Uber, UberEATS, Postmates, Nimber, Melabiz
7. Marketplace app
- Cost: ~$115,000+ (web platform)
- Timeline: ~7+ months
- Examples: TripAdvisor, Booking.com
8. IoT & Hardware app
- Cost: ~$30,000+
- Timeline: ~3–5 months
- Examples: Beacons, Amazon Dash Buttons, WeMo, BELI Printing Service, Jo
In conclusion, the following table summarises the key approximate app 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 (MVP)
Phase 2: Ongoing app development
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.
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 excludes support and app maintenance costs.
So, how much does it cost to maintain an app?
Recent studies regarding the ongoing app development cost state:
- Typical 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 cost will be spent on maintenance during the first year, 25% in the second, and 15%-25% each subsequent year (Outsystems Survey, 2018–19)
Conclusion: How to Build Your App on a Budget
- Do your homework Note the app requirements (technologies, platform(s) market research, and target audience, etc.
- Choose the right app development team
These vendors are likely to work on minimizing the app costs and timeline, and:
- build and work on their own open-source libraries
- use their own best practices and ready-made solutions for the intended functionality
- apply only proven and working libraries and third-party services
- utilize effective project management processes and tools
- apply just the right technologies and development tools
3. Take into account hourly development rates (Outsourcing to Eastern Europe, e.g. Ukraine, is preferable since it provides a good price-quality ratio)
4. Start small (MVP development methodology)
5. Use simple app design
6. Monitor and be involved in the process as a Product Owner
7. Planning is key
8. Receive a detailed project estimate
9. Stick to the app scope
This is a brief summary of an article published on MLSDev blog. If you want to know more details about app cost and its development on a budget — read the full article.