How Much Does a Mobile App Cost in 2020? | Business Perspective
Discover how much it costs to build a mobile app in 2020 and how to reduce development costs with four proven practices.
“How much will it cost to build my app?” This is probably one of the most common questions we hear from our clients. As businesses face overcrowded markets and high competition, they feel the pressure to digitize. But they still want to do it in the most cost-effective way possible.
The easiest way to answer this question would be saying, “It depends.” And then adding: “When it comes to building a mobile app, you get what you pay for.” But if you’re reading this article, you’re probably wondering how much money it really costs to make an app – and what factors shape this price tag.
We decided to share with you some essential bits of knowledge about the cost of software development in one place and give you a complete picture of mobile development costs.
Read this article to find out how much you can expect to pay for realizing your idea in 2020 and how to reduce development costs with our battle-tested practices.
Table of contents
- Hire an outsourced development team
- Prioritize features early on
- Involve Quality Assurance (QA) early on
- Plan for the future
1. How much does it cost to develop an app?
A recent report about the cost of app development showed that the average price of a simple application is located somewhere between $40,000 and $60,000. A medium-complexity app may cost between $61,000 and $69,000. If you’re planning to build a complex app, the research tells us to expect to pay between $70,000-$100,000.
In our experience, the best way to talk about the cost of mobile app development is by thinking about it in terms of complexity. And so:
- Basic applications cost around $29,500. Such apps take the development team from 500 to 700 hours of work (development + QA). An example of a basic application is a mobile app that has a well-defined scope and includes a limited set of features.
- Medium-complexity applications include more sophisticated features like customer-facing server applications. It can be an enterprise app offering mobile and web functionality. In this case, building such an application will take the team around 700 to 1200 hours, and the estimates will range from $29,500-$50,500.
- Complex applications that require building a complicated architecture and multiple integrations or meeting high security demands cost even more. They take more than 1200 hours to complete. Examples of such apps are enterprise software that features complex business logic, social media applications, and reporting apps. Naturally, there is no upper price cap in this case because the pricing will ultimately depend on the number of complexity of features.
This rough estimate can serve as your starting point in understanding how much it really costs to develop a mobile app.
Examples of app development costs
To give you an idea, here are a few popular apps together with their funding levels to help you understand how much money is required to come up with similar applications.
- Uber received $200 million in seed funding for implementing their idea that eventually disrupted the prop the transportation sector.
- Tinder, the most popular dating application, raised $485,000 in seed funding back in 2012.
- The social media tool Snapchat raised $485,000 in 2012. Note: the application received the total funding of over $3 billion.
- The photo-sharing application Instagram received $500,000 in seed funding to allow its further development.
Judging from the above, it’s clear that app complexity and the number of features are significant factors that affect the final price of a development project. But they’re far from the only ones.
In the next section, we take a closer look at the key factors that affect the cost of building a mobile app.
2. What factors affect the cost of mobile app development?
a) Geographic location
The price of mobile development will vary a lot depending on where you hire your development team. Naturally, in countries such as the UK, the United States, and Australia, the hourly rates of software developers is much higher than in locations such as India, China, or Eastern European countries like Poland or Ukraine that are becoming a popular outsourcing destination.
So how much does it cost to make an app depending on where you’re planning to hire? Here is a breakdown of average hourly rates of senior software developers in different regions of the world.
Is hiring a local team a good idea?
The team you hire for the job will have a huge impact on the final cost of development. The only serious advantage of developing an app locally is the fact that the team is located close to you physically, which might simplify communication and boost your chances of success.
It’s easier to explain the particular requirements of your product face-to-face, hold regular meetings, and meet the team in-person before paying a lot of money to build your solution. Local development teams may come with greater involvement in the project.
So, what is the key drawback of hiring a local development team? Most of the time, it’s going to be more expensive, and the talent pool you’ll be choosing from will be limited.
Here’s why outsourcing is a smart move
The popularity of outsourcing software development means that outsourcing providers are well prepared to handle such collaborations.
Videoconferencing and instant-messaging tools make it so much easier to communicate with an overseas team. Moreover, experienced providers make sure that the remote team has all the tools it needs and follows the best industry practices for a smooth development process. Foreign developers may come with a higher level of expertise at a reasonable cost. They can perform a lot better in comparison to the local ones.
Just think about it this way:
If you want to hire a development team locally, your choice is very limited. But if you consider outsourcing, you can choose from any country in the world. For example, you can even hire a team that works while you’re asleep so that every day you wake up and see the results of their work.
The undeniable advantages of outsourcing development are:
- access to a huge talent pool,
- high level of expertise available,
- greater balance of talent and cost,
- full flexibility.
The most serious drawbacks of outsourcing are:
- time zone challenges,
- communication, and project management issues,
- less personal control over the project.
Still not sure? Here are two guides to help you prepare for an outsourcing collaboration:
- In-house vs. Outsourced Software Development
- 3 Popular Software Development Pricing Models
- Time and Materials vs. Fixed Price
Consider the pros and cons carefully before choosing your option. The growing popularity of nearshoring and offshoring indicates that more and more companies are willing to make their app development cost-effective and take advantage of foreign talent.
b) App features and their complexity
As we mentioned before, another factor that affects the mobile application cost is the sort of app you’re looking to develop. Before launching a collaboration, your development team will estimate how many man-hours will be required to implement your specifications. This step is a key point in preparing your project.
The critical factors that influence our development costs are the app’s features and functionalities, platforms you want to build for, customization of visual design, the complexity of backend infrastructure and administration, and maintenance costs (we’ll cover this topic later on).
In reality, the number and complexity of features you’re planning to implement in your app will be the most significant cost driver in app development. We’re talking about the amount of business logic required to be translated into the software, the number of screens, buttons, and other elements like in-app purchases that require third-party integrations.
- Read this: Top 24 E-Commerce Mobile App Features
While implementing some features is relatively straightforward, others might be more challenging. Depending on their complexity, the development team might use ready-made solutions or write code from scratch.
Here are a few examples of app features you may need to include in your application and how they affect the final price of building your app.
User engagement features
Such features are authorization, networking, notifications, and others. Even a user authorization feature can come in many varieties that can be simple or more complex.
- Adding functionalities such as storing passwords, password recovery, attractive visual design, or logging through social networks will increase the cost of your app.
- Features such as push notifications, social sharing, or commenting and liking content via social media profiles will require some extra costs too.
- Note that they often demand integration with third-party libraries and frameworks.
This range of features has to do with the ways users can purchase things in your app. Credit cards, Google Wallet, Apple Pay, and PayPal are all popular forms of payment within apps. Every payment processing method will demand extra time for implementation and increase the cost of development.
If you want to implement innovative technologies such as geo-fencing or beacons, building such features is often time-consuming and expensive. Also, you will have to find a development team that has the right expertise on board to provide you with such services, and that might cost you time as well. Ultimately, integrating any of the more advanced location-based services will also drive up the cost of your app.
Just a few years ago, software that took advantage of device features could only use things like dialing, camera, or location information. Today, developers can integrate many other things such as near communication field (NFC) chips, payment systems, and newly emergent device features.
Note: To create an app that can access mobile device features, developers need to use platform-specific APIs. New features will require introducing new APIs in which development teams might have less experience. That’s why the development time may increase and, as a result, affect the total cost of building your app.
Another choice that will affect the price of building your app is whether you want it to work on one or multiple platforms. When making your decision, take into account factors like the market share of iOS and Android devices, device fragmentation, and prevalence, as well as the specificity of developing for each of these platforms. iOS and Android use different programming languages with different SDKs and tools.
If you’re developing an app for a single platform, you’re not going to see a significant price discrepancy between Android and iOS. However, if you want your application to support two or more platforms, the cost of development will increase going to increase.
Cross-platform or hybrid app development is a popular and cost-effective solution to this problem. When building a hybrid app, you’ll only have to hire one development team. Building separate apps for iOS and Android will usually require two development teams. As you can imagine, the costs will be much higher.
d) App maintenance cost
This point is something many prospective app owners forget about. We tend to think that app development costs run only until the solution is ready. This is not true. Consumer and market trends are constantly changing, and your product needs to address these changes in order to stay competitive. That’s why maintenance and updating are such important aspects of app development – and they’re also a factor in its costs.
In many cases, the cost of app maintenance may account for a significant chunk the original price of development. Its price depends on the projected duration and the number of hours required for proper support.
Maintenance is a critical service even if you’re not planning to scale up your app or add new features anytime soon.
What exactly do you get in maintenance service? Services such as code optimization, improving stability and performance of your app, adding support for the latest operating system versions, developing new features, bug fixing, and supporting the latest version.
App development is just a start. The fun begins when you gather feedback from first users, adapt your product to the market needs, and prepare the solution for a larger scale. That’s why it’s best to continue working with a development team even after your product has been completed. Software development is a continuous process, and companies like Droids On Roids offer post-release support.
3. How to reduce the costs of app development?
Fortunately, business owners can reduce the costs of developing mobile applications by following a few industry practices and applying some smart tricks. In this section, we take a closer look at the different methods companies use to lower the cost of developing mobile apps.
Hire an outsourced development team
Outsourcing software development will bring you plenty of cost savings throughout the project. You won’t have to invest in the high salaries and overhead costs that come with hiring developers in-house. There’s no need to pay salaries, taxes, perks, software, hardware, workspace, and many other costs. By outsourcing app development, you can employ teams from all over the world and take advantage of their cost-effective services that often come with high quality.
Prioritize features early on
You need to prioritize your app features correctly before beginning their development. Just because you’re not able to build a complete software solution right now, it doesn’t mean that you have to give up on your dream.
It’s smarter to prioritize the functionalities of your app to start driving business value as quickly as possible. This also helps to create an accurate software project estimation.
Save the nice-to-have elements for the later stages of development and add them to your backlog. By starting your project with a Minimum Viable Product (MVP), you get to build a successful product without investing a lot of money into a high-risk project.
The world of IT is constantly changing and investing in a large system with a full range of functionalities doesn’t make sense. Smart business owners build digital products incrementally and keep a close eye on the market trends.
Want to learn more about MVP development? We prepared these handy guides for you:
- What is a Minimum Viable Product? MVP Definition & Business Meaning
- How to Build a Minimum Viable Product – MVP Guide for App Owners
Involve Quality Assurance (QA) early on
Since bugs and errors may accumulate already during the design phase, you need to address them as soon as possible or risk that they spread out through your entire project. By involving QA professionals right from the start, you will identify serious problems before the development phase begins. As a result, you will save up on redesign costs that might become very high in the middle of your project.
Plan for the future
Remember that the costs of building mobile apps extend beyond the development and release phases. A complete application will still generate expenses.
The app you develop today might look completely different in the future. For example, if you release an MVP, you might get customer feedback that inspires you to change some features. Your target market might evolve in a completely new direction, forcing you to change your product as well.
That’s why it’s smart to be mindful of short-term and long-term goals in developing software. It will save you plenty of money down the road.”
We hope this article helps you to understand how much it costs to build mobile apps and what factors affect the total price of your project. By following the tips above, you’ll be able to lower the costs of building your solution and ensure that your digital product is developed in line with the global tech standards.
If you’re looking for a skilled mobile development team, get in touch with us. We have delivered a number of projects for clients from all over the world operating across different industries.
We can provide you with expert advice on how to reduce software development costs at each stage of your project.
Our experts know how to make the most of the existing technologies to speed up native mobile development and ensure fast time-to-market so that your product starts generating value as quickly as possible.