What is the cost of developing a custom mobile app?

In today’s era of modernity, companies are progressing towards making their products and services available digitally as well. This comes in the form of websites and apps. Furthermore, intangibles like customer engagement are also improved, as well as operations are streamlined. This helps companies gain a competitive edge. Smartphones have become an essential and indispensable part of people’s everyday lives, and global mobile app revenues are projected to reach $781.70 billion by 2029 (Statista). This is evidence that the demand and use of mobile apps across all categories have increased significantly. However, the first question companies are concerned about before developing their app is: What is the cost of developing a custom mobile app?

Understanding an app’s creation cost is crucial, as it helps with effective budgeting, good strategic planning, and ensuring a healthy return on investment. This comprehensive and wide-ranging guide examines the various components that contribute to creating an app, how app companies calculate these expenses, and how businesses can prepare themselves for both visible and hidden charges associated with developing mobile apps.

App development cost breakdown

To fully understand app development costs, it’s necessary to differentiate between the various components that contribute to the app’s final pricing. This is crucial because these factors not only make up the initial investment but also have a lasting influence, for example, sustainability and the competitiveness of a company’s app in the market. 

App Complexity

One of the most decisive factors in determining the cost of app creation is its complexity. A basic app that focuses on a single function, such as a clock or a calculator, typically costs between $10,000 and $30,000 on average. These apps are typically the most affordable due to their limited features and minimal backend requirements. Contrastingly, more complex apps that offer more functionalities, such as social networking (e.g., Instagram), marketplace integration (e.g., Amazon), or real-time services such as Uber, can exceed $300,000.

Features and Functionalities

Advanced and more complex features, such as GPS integration, user authentication, in-app messaging, social media sharing, payment gateways, and chat systems, cost more than basic features and have associated cost implications. An example of this is payment gateways; integrating a payment gateway like Stripe or PayPal can cost a company between $3,000 and $10,000. A survey conducted by Cleveroad in 2023 suggests that real-time chat features alone can add an average of $12,000 to $20,000 to the total app cost. 

Platform Choice

A company needs to decide between Android, iOS, or both, as development on Android can be more expensive and time-consuming due to the diverse and wide range of devices and OS versions, all of which require extensive testing. However, a solution to this problem could be using tools like Flutter or React Native, which, while dealing with cross-platform development, offer cost advantages, such as 40% savings; however, there can be minor compromises in performance in some cases.

Design and UX/UI

The key to any well-crafted user experience is to ensure that user retention and engagement are maximized. The expenses associated with this design can range from $5,000 for basic UI to upwards of $50,000 for more complex interactive and animated interfaces. A report by Forrester Research suggests that apps that have clear navigation and an engaging UI increase their user retention rates by 300%. Examples include companies like Airbnb and Slack, which have attributed part of their early success to prioritizing intuitive design.

Development Team Location

The app’s cost is also significantly influenced by the geographic location of the development team responsible for developing the app. Developers located in North America (U.S., Canada) typically charge around $100-$200 per hour, while firms based in Western Europe charge $70-$150 per hour. Firms in Eastern Europe (Ukraine, Poland) are generally more affordable, charging $25-$70 per hour. South Asian developers (from India, Pakistan, and Bangladesh) are among the most affordable, offering rates as low as $15-$40 per hour. 

Maintenance and Updates

Any app requires support after it is launched to ensure its survival. This includes maintenance, which includes bug fixes, server costs, content updates, feature enhancements, and compatibility adjustments for different OS. This means that for an app initially costing $100,000 to build, its yearly maintenance costs can range from $15,000 to $20,000. Postlaunch is one of the important phases in the lifecycle of an app, and neglecting it can lead to app store removals as well as the loss of users. 

How much does it cost to develop an app based on the development stages?

Each custom mobile that is developed undergoes numerous stages, each of which contributes to the overall cost of app creation. Let’s break down the cost structure by these key stages:

Discovery Phase

The foundation for successful app development is laid in the discovery phase, setting the groundwork for the entire project. This includes activities such as market research, requirement gathering, competitor analysis, and feasibility studies. The estimated cost of these activities averages $1,000 to $1,500.  The impact of this stage is that it reduces risk and aligns the app with the business’s goals. A report by McKinsey states that 45% of all IT projects exceed their budget due to poor requirement analysis—a strong discovery phase would help avoid this problem. A well-conducted discovery phase helps reduce the risk of scope creep and budget overruns. According to PMI’s Pulse of the Profession report, poor requirements gathering is responsible for 37% of project failures.

Design Stage

This stage of development focuses on enhancing the user experience (UX) and user interface (UI). In this phase, wireframes, interactive prototypes, and high-fidelity UI designs are created and tested. The estimated costs associated with this phase can range from $5,000 to $25,000, depending on the number of screens used and their complexity. This stage is also quite essential, as a well-designed user interface can improve retention by up to 200% (Forrester Research). Companies that prioritize design tend to outperform their competitors by 219% on the S&P 500 Index over a 10-year period (Adobe).

Development Stage

The development stage of any app is the core stage because it is where both backend systems and front-end interfaces are developed. This stage is typically considered the longest and most expensive phase because activities such as coding the frontend (interface), and backend (server, database) take place. Third-party integrations, architecture setup, and admin panel development also take place during this stage. The estimated cost of this stage is approximately $100,000 to $ 200,000. The price varies depending on the complexity, the number of platforms (iOS, Android, Web), and the depth of the features offered by the app. This takes into account robust encryption, cloud infrastructure, and server-side scalability.

Testing Stage

This stage is important to the overall development process, as it ensures that the app functions properly across devices, is secure, and provides a smooth experience for its users. This would include manual testing, load testing, security audits, and cross-platform and cross-device testing. The estimated cost of this stage ranges from $5,000 to $20,000, depending on the size of the app and the level of automation coverage.

Testing is a vital stage in the development of an app—IBM states that the cost of fixing a bug after an app has been released is six times more than simply fixing that bug during development. Testing also helps to prevent costly downtime and poor app reviews.

App development cost based on Types, platforms, and Technology

App Types

The price range of an app varies across the different app categories.

·  Simple apps, like single-function apps e.g., a calculator or a torch can cost from $10,000-$40,000. Such simple apps typically only involve 3-5 screens, no backend, and not a lot of user interactions.

·  Data-driven apps typically require investments ranging from $20,000 to $60,000. Examples of these apps would be weather apps, which rely on APIs to fetch data and then visualize it. The need for dynamic content, real-time updates, and offline features in some cases makes these apps more expensive than static apps.

·  The total app cost for e-commerce apps can range from $60,000 to $150,000. The high app cost is associated with their need for complex backends, databases for their various products, and the integration of payment systems (e.g., Stripe, Razorpay), as well as order tracking, among other requirements.

Social Networking apps like Instagram or LinkedIn include features such as messaging, profiles, video, and image sharing, and all these different features demand very high scalability and robust moderation and security systems. This makes social networking apps generally very expensive to develop, with costs ranging from $100,000 to $250,000.

· Apps like Uber or Foodpanda, which offer on-demand services and products, are generally very expensive due to features such as GPS tracking, real-time availability, complex user flow systems, and support systems. These can cost around $150,000 to $300,000 to develop.

Platform Types

iOS

Building on iOS is generally considered to be a faster process due to the smaller number of devices and screen sizes. The estimated app cost on iOS can range from $15,000 – $150,000.

Android

Building an app for an Android system requires more testing than for an iOS one due to device diversity and OS fragmentation. Android app development costs can be 10-20% higher than on iOS.

Cross-Platform

Tools like Flutter or React Native can be used, through which coding is only required once, and then the app is deployed across both platforms. This results in an average saving of 30-40%.

Technologies

Any app that offers the best performance is on its native operating system. Native languages include Swift, which is that of iOS and Kotlin of Android. Cross-platform technologies, however, are quicker to build, but there are certain compromises when it comes to speed. React Native and Flutter are the most popular tools for cross-platform development. As for backend technologies, they include Node.js, Django, and Ruby on Rails. Selecting either one can have implications for speed, scalability, and the total app cost.

What are the 5 hidden costs in developing a mobile app?

Apart from the upfront costs of app development, businesses should also prepare themselves for ongoing expenses related to their apps.

App Store Fees

Apple Store: Apple’s app store charges a fee of $99/year for individuals, as well as a 30% commission on all in-app purchases. Enterprises, however, are charged a fee of $299 per year.
Google Play: Apps on the Google App Store pay a one-time fee of $25.

Maintenance and Updates

Regular updates, bug fixes, and performance improvements are generally estimated to cost around 15-20% of the total app cost annually.
Maintenance Costs can also include content updates, security patches, and other related expenses.

Third-Party Services and APIs

There are numerous examples of third-party services that are integrated into an app. These include Google Maps, Twilio (SMS), and Stripe (payments). These are recurring costs that can range from $100-$5,000/month.

Furthermore, if an app is heavily reliant on external APIs, costs can increase based on user volume or usage limits.

Marketing and User Acquisition

This refers to App Store Optimization (ASO), influencer marketing, and paid ads. The costs associated with these can range from $1,000 for minimal campaigns to over $ 100,000 for aggressive user acquisition.

Facebook Ads, TikTok promotions, and Google AdWords are the most common paid channels used.

Data Storage and Server Hosting

Using services like AWS and Firebase can add varying costs of $50 to $5,000+, depending on user traffic and storage.

An example of AWS could be using EC2 instances for the backend, which costs $100/month for low traffic. Using S3 for media storage can incur a monthly cost of $25. Using RDS for relational databases can cost up to $80 per month.

How to estimate your app development cost?

Estimating the final app cost involves doing research and planning and having clarity about what the company intends its app to be.

Scope

You should start by creating a detailed list of features you want your app to have. After this, essential functions should be prioritized, and an MVP (Minimum Viable Product) can be created to get a feel of the market with a leaner version of the app. This can help in getting important user feedback. For reference, common feature costs include stuff like user authentication ($1,000-$3,000), push notifications ($1,500-$3,500), and chat integration ($4,000-$10,000).

Development Partner

It is necessary to get proposals and price quotes from different app development companies so that the best one can be selected. Pricing isn’t the only important thing, but other things like communication style, and transparency should also be taken into consideration when choosing the right proposal. A good partnership can help save both time and money in the long run.

Cost Estimators

Companies can use online tools like Buildfire, and Cleveroad which offer total app cost estimations for the development of an app. These are useful and can be used to compare the costs of using DIY app builders versus opting for fully custom development. These costs definitely aren’t accurate, but they offer an estimated starting point for budgeting.

Pricing Models

Pricing between different development teams can differ, each development team has its own pricing model. A fixed-price model would be suitable for small projects which have a well-defined scope. If a more flexible model is required, then a time and material model could be employed. For large-scale projects, hiring a specific development team for that project might be more cost-effective. Pricing Models should therefore be discussed beforehand so that any unexpected charges can be prevented.

How can Coding Crafts help you optimize App Development Cost?

Coding Crafts has helped hundreds of businesses to develop their own mobile apps. Our Android and IOS app developers are pros of app development and will help in efficiently using money and resources for development. Additionally, we guarantee a hassle-free experience for our clients thanks to our open and honest communication and approach. Simply reach out to us and we’ll take care of the rest!