App Development Cost

If you are an app developer, even to say that the number of times you answered the question “How much does to cost to have an app developed?” may be around a thousand can be injustice. There is no doubt that budgeting the cost for an app can be a daunting task. It is one of those things that can cost as low as $5000 to more than a million dollars. That is certainly a huge range and this makes planning ever more difficult.

Basic criteria

There are certain criteria that you look at that will make your cost planning a bit easier. These criteria are as follows: -

· Nature of the app — what this means is that the more complex your app gets, the more it will cost. If you want to make an app that includes a number of features, then certainly it may be quite expensive. This also means that an app which requires some back-end support will cost extra as compared to an app that is stand-alone and does not require heavy back-end services.

· Type of creator — an app that is created by a specialized agency is certainly going to cost you more than the one built by freelance mobile app developers. So you need to consider whom are you going to approach to build your app in order to optimized your available budget.

· Follow-up costs — the cost of app development does not end once the app is finished. Rather, there is a whole set of extra costs for marketing, updates etc. that needs to be considered after the app has been built.

One thing that I can confidently say is that no matter what type of app you need building, a budget below $5000 is highly unlikely to get a credible firm deal with you.

The following will provide certain figures based on estimates given by venture capitalists. In addition, actual financial costs for reputable and popular apps will also be listed. The reason to choose such categories to give you an idea of the costs involved is because most companies today are based on some sort of app. There a number of companies whose primary product is an app. However, it must be noted that the estimates and the actual costs relate to high-end apps; but it is still relevant for the purposes of this discussion.

Some cost figures as per Venture Capitalists

A lot of VCs will have some amount of difference in what they quote as the cost of developing an app. However, for this article, I would like to mention the amount quoted by Jason Calacanis who posted a blog in which he discussed how much money should start-ups raise in their first round financing. $750,000 is what he estimated for the first round spanning over 18 months. Again, this may not be true if you hire mobile developers that have an independent small or middle establishment. Moreover, the development of medium application will cost you 5000–50000 dollars, if you hire a company from Ukraine.

The $750,000, however, is not just for the technical side of app development. Around $120,000 can be attributed to legal and accounting costs according to Jason. This leave us with $630,000 which can be divided as follows: -

- $35000 per month that will go toward the development team consisting of four people — a very standard number of members, I would say

- If we take a v1.0 app which usually takes around four to six months to get completed, the total cost for the entire period based on the above estimate would be:

$35000 * 4/6 = $14000/$210000

Another figure as provided by Manu is considered as pre-seed round. This amounts to approximately $500,000 that is spent on making a team and creating the preliminary prototypes. An estimate for eighteen months, this would come around $23,333.33 per month. Considering a v1.0 app that takes four to six months, the cost will be: -

o $23,333 * 4/6 = $93332/$140,000

It must be noted that this is an estimate for the pre-seed round which means the funding that does not involve the actual seed funding required. This amount may be around $2 million which will pull up the above estimate quite significantly. It can very well be compared to the development costs for Snapchat that included $485,000 of seed funding. Yo’s seed funds, however, amounted to $1,500,000.

Actual costs for real apps

Most of you must have heard of Twitterific. As an answer to the question of what would Twitterific cost to be built, Craig Hockenberry stated that the amount would be $250,000 for both iPhone and iPad. Although the app is compatible for both of these devices involving a considerable use of API along with a very interactive user interface, the app does not rely on any specific server.

This is just one example. Let’s consider Instagram for a moment. The app has a very heavy reliance on backend services and is said to have costed around $500,000 backed up by venture capitalists. This involves both front and back ends.

Although, back-end service providers such as Parse or Firebase makes things a lot easier as the service is much more seamless and cost-effective, it still costs a lot if you are to have an app that has a server support. Instagram consumed up to $500,000 when it was first launched and this amount is excluding Android compatibility.

An app such as Uber, may cost even more as it has a very high server involvement. It costed almost $1,500,000 as part of seed funding only.

Therefore, based on the above research, it can be established that apps that are quite sophisticated in their design can have a cost ranging from $250,000 to $1,500,000.

Cost depends on who is building the app

This is a question of brand and credibility. Quite obviously, a well-known agency will charge a lot more for an app than a small freelancer. Outsourced development is not always an easy game. Depending on whom you ask, you can expect a lot of variance in the amount that is needed to get an app developed. In fact, some of the largest mobile app developers will not even consider you as their client if you are considering something below $500,000. Usually, their starting point is $900,000 which, again, is just an estimate that can go much higher.

Moreover, it is becoming much more common to have clients that need apps backed up by servers. Additionally, most of them want regular updates and new features added. This can perhaps be a result of the highly competitive market today for apps. There are hardly any stand-alone apps on the App Store or Google Play. Most of them usually have some sort of back-end service going on.

Nevertheless, smaller mobile app developers can be lenient in their charges and can build an app for a bit less.

Hence, if you are considering having your app built by larger app companies, be prepared to have budget $200,000 and more. Medium-sized agencies can charge you $150,000. On the other hand, the cost for app development with regards to small shops consisting of a couple of people can be around $50,000.

It is important to note that not only the size of the development company determines the cost of the app. A similar application can cost 3–4 times cheaper if you hire a developer from Ukraine. The average price is rarely exceeds $ 50,000. An hour of work on your application will cost about $ 25. This is not to say that the quality will be lower proportionately. On the other hand, large companies do use the services of these companies, outsource them the development of their client’s apps.

Other Considerations

As mentioned earlier, apps that do not include much back-end service and do not involve APIs usually cost less regardless of the size and popularity of the mobile app developers. However, this is not something that will hold every time. Even stand-alone apps can be quite expensive. This is because they may have features that are quite complex to integrate.

Furthermore, the platform an app is being built for is also a factor in determining the cost of an app. Android apps take much more effort than the apps built for iOS. This means that you need to have a larger budget if you want an app for Android than when you need one for iOS.

Finally, the cost marketing, promotion and the likes need to be considered and planned beforehand. This is especially true if you are a novel app developer who is doing everything by yourself.