Four Forces That Will Drive Mobile App Development Prices Down
Mobile apps have become an irreplaceable part of everyday life, so it’s no surprise that mobile app development is one of the most lucrative businesses out there. However, due to various economic factors, mobile app development prices are slowly but surely tumbling.
By 2018, mobile application prices will drop up to 80%. This drop can be estimated by analyzing mobile market and business development data from two mobile app companies present on the U.S. and European markets: Five Agency and Shoutem app builder.
Four factors influence the lowered costs of mobile development: the use of SDKs due to custom development, global market competition, frameworks for web developers, and the automation of maintenance and less-demanding development tasks.
1. SDKs are trending in app development
A couple of articles have already written on this topic in TechCrunch and VentureBeat. We keep seeing the same pattern in practice. For example, the WebSummit/Collision app uses the Layer SDK for messaging between conference participants. Plugging in, customizing, and making the UI an integral part of the conference app, which usually would’ve taken months to develop, took only a couple of days.
It makes perfect sense that the list of SDKs used in our apps is getting longer every day. Analytics (Google, Flurry SDKs), push notifications (Parse, Urban airship), customer communication (Intercom), and deeplinking (Branch.io) are just some of them.
Mobile development was completely customized until a few years ago, when SDKs started evolving. Today, 20% of all app development happens with support from development kits or builders. In the future, we expect the majority of apps to be built on top of frameworks and SDKs. Up to 80% of our apps will be built with the help of SDKs, and all our effort will be spent on designing the UI and working on functionality, customization, and innovation.
Of course, building apps is less time consuming now, so the average time for the whole development process is also dropping. A few years ago, it took us six months to finish the first version of an app we built for an e-commerce giant. Today, apps of similar complexity are built within two or three months. On top of that, the production time for an app MVP will drop even further; to less than one month over the next couple of years. In addition, these apps will be much more stable, they will have better UIs, and the maintenance costs will be much smaller in the long run. Thus, they will be much higher quality in general, which brings us to our next point.
2. High quality global competition
The article “The Rationale Behind Soaring App Development Prices” points out a huge gap between the top mobile app development prices per hour in the United States ($250) and Indonesia ($20). Eastern European developers are a bit more expensive than those in Indonesia. They charge around $40 an hour on average, which is still much cheaper than the average U.S. price of around $140 an hour.
The data displayed was taken from the article “The Rationale Behind Soaring App Development Prices”. The displayed price estimations are based on the reported median value.
The truth is that if you’re looking for a mobile app development agency, you’re much better off working with an offshore company in Europe or Asia. Their development, UX/UI, business problem solving, and project management skills are at the same level, if not better than, those in U.S. companies.
“The truth is that if you’re looking for a mobile app development agency, you’re much better off working with an offshore company in Europe or Asia.”
There is a reason for that: the agency ecosystem in the United States is not the sexiest. Everyone who is any good wants to work for a startup and get rich from stock options. If not, they want to work for Facebook or Google and enjoy all the perks of working for a big company with an unlimited budget (e.g., a slow-paced work environment and a huge salary). The agency business is strenuous and stressful, and there’s no immediate gratification to keep employees motivated for a long time. Development agencies in the United States have a hard time employing even below-average developers, who tend to leave companies after six to twelve months.
In Europe and Asia, the tech scene is much less developed, and the agencies working for global U.S.-based clients tend to be the top employers, easily attracting and retaining the best talent. Profit margins are high enough that the companies can pay employees top salaries and work under a reasonable amount of pressure. In short, working with a mobile dev shop in Europe will cost you less, and you’ll get better quality work than anywhere in the United States. Just saying.
3. Frameworks for web developers
React Native and NativeScript have been picking up a lot of steam lately. Native developers have discussed these technologies a lot (i.e., in this Medium post), and one of the big reasons why these frameworks might succeed is that they use native UI libraries to render UIs that have native performances and that look and feel native. This opens up many possibilities for thousands of web developers familiar with JavaScript and CSS and enables them to build high-end, cross-platform apps.
The growing interest in React Native is also obvious if you look at this Google Trends graph:
Since late 2015, interest in React Native has increased, while relative search volumes for iOS and Android development have been more or less stagnant.
We saw the same thing happen 15 years ago when UI toolkits using native UI libraries on Windows, Linux, or Unix made cross-platform development much easier and provided a native look and feel on each platform. There are many parallels with the opportunities React Native brings to the table.
4. Most of the manual costs of long-term app maintenance will be automated
Enormous effort and huge budgets are required just to maintain compatibility with the fast-moving ecosystem. Things like SDK updates, UI design updates, and App Store and Google Play binary submissions currently require large amounts of effort and valuable resources to be executed. However, in a year or two, many maintenance processes will be automated. This will enable developers to invest their knowledge and efforts into where it matters the most: innovation.
What used to be the apple of discord between developers and investors, who usually set a budget for application development but often fail to include a budget for long-term app maintenance, has recently been made easier by the automation of the maintenance process.
“However, in a year or two, many maintenance processes will be automated. This will enable developers to invest their knowledge and efforts into where it matters the most: innovation.”
Conclusion
Based on all these factors, we should see the cost of a typical app development project decrease by half in the short term (1–2 years) and even more than that when we look at a five-year time frame.
Current prices for mobile app development can range from $50,000 to up to $500,000 just for the initial version. If you calculate the maintenance and update costs in a two-year lifetime for an app, you are looking at a budget between $200,000 and $1,000,000.
In the next couple of years, these prices should drop, and we will probably see prices between $15,000 and $20,000 for basic apps completed in a month and between $100,000 and $200,000 for more complex apps with longer production cycles.
