Cost of application development is probably the most burning question (well, one of several burning ones along with where to get talent?) for anyone looking to bring their mobile idea to life. We already tried to answer this question in our earlier blog post as well as in this one about cost of the IoT app development, and now it's time for some updates. It's pretty clear that costs are very much dependent on the overall application's complexity and robustness, native versus hybrid (cross-platform) type of development, use of reusable components and frameworks that help lower the price of development project, use of bespoke versus template-based design, experience and competence of mobile developers, geography, and many others.
One thing is true for sure - the cost of application development is very individual and depends directly on app's functional features, uniqueness, maturity of your development team, your project location and your or your service provider's ability to find, attract and hire the right people for your project team fast as well as your or your provider's ability to optimize budgets.
Whenever we at Intersog receive emails or phone calls from people who want to know the exact cost of their app development without providing too much detail, the only honest answer we can give is: "It depends". It's next to impossible to price an app without having a full scope breakdown. However, based on our experience, we can share some ballparks for app dev cost depending on its nature and the average number of man-hours required to complete it.
I personally like the approach set forth by Jacek Michael Gre, Partner at SWARM, a digital product company in NYC.
"A good guideline to go by is that an app will cost as much as a car. Whether you opt in to buy a Kia or a Ferrari is entirely up to you!"
Taking this car analogy further, Jacek Michael says: "You can pay for a Kia, it’ll work, but may break down on you more often than a BMW; it won’t have the same driving experience as a Porsche and it won’t be as sleek looking as a Maserati. Will it do it’s job? Probably. Will it do it well? Depends what you want it to do."
Back to app dev cost, if you're going to do your project in the USA, brace yourself to pay $60,000 +/- $20,000 for building a market-ready solution with rather basic features and simple back-end integrations. A clickable app's prototype or MVP will cost you up to $40,000. If you're looking to develop a completely unique app and disrupt the market with a truly innovative product, you will be dealing with a six figure range. The average cost of an enterprise mobility solution is $150,000, but in most cases enterprise apps run in the $300,000 and up range.
While these figures can be rather shocking, especially for startups and small companies, let's look at this from a different perspective.
To build a good native application in-house, you'll need at least 2 full-time developers (iOS and Android) at $120,000/year each ($10,000/month each), a part-time UX/UI designer at another $100,000/year ($8,000/month), QA engineer at $80,000/year ($6,500/month) and a team/tech lead to manage the process and do database design and who'll cost you another $120,000/year. Keeping all this in mind, your total cost of team will hike to $50,000 / month. The average length of functionality development, design and integrations is 4 months, so multiple $50,000 by 4 and you'll get a price of $200,000.
If you outsource your project development overseas or nearshore and use time and materials (T&M) model with blended rates, the cost of your development will depend on your blended rate: the lower the rate, the lower the cost. So, if your rate is, say, $90/hour and your project takes 600 hours to complete, the average price of your app development will be $54,000 plus some overhead.
In case of outsourcing, it may make sense for you to hire a dedicated remote team and stick to a salary + management fee model. In this case your project development expenses will be comprised of your team salary and vendor's margin. I encourage you to read more about outsourcing pricing models in my earlier blog post.
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To better demonstrate some options for building mobile applications in a cost-effective way, let me tell you our new client's story and how much it'll cost them to build a cutting-edge (I know this word is way overused these days, but I do mean cutting-edge) solution for connected car.
Intersog has recently won a new client, a recognized technology leader in the rapidly growing telematics and connected vehicle market (it's under NDA now, so I can't reveal the brand name, sorry). The project they're doing with us is development of CarPlay and Android Auto apps featuring smart trailer technology and a dashboard interface. The client's proprietary system will interface with the smartphone (projected to dashboard) via GATT Bluetooth LE while the mobile device is connected to the vehicle through USB. The mobile apps will be done with native iOS (Objective-C/Swift) and Android (Java) code and will utilize the respective CarPlay and Android Auto SDKs.
We estimated the initial prototype phase to take 2-3 weeks and the entire project to be completed in 5-6 months. The estimated hours for this project are 1,000 for the CarPlay/iPhone and Android Auto/Android apps as well as the required back-end integrations. Android only will be around 530 hours and iPhone only will be around 480 hours. In order to optimize the client's budget, it was decided to split project execution into 2 parts:
- T&M: pricing for this project is based on a blended rate for all team members and is contracted as a fixed bid billing engagement; and
- Intersog has hired and submitted an on-site IT consultant to work within client's in-house team for a 6-weeks period billed on an hourly basis.
The estimated project value is $90,000, which is a fair amount for the project scope.
Back to our car analogy, our client actually bought a new (non-used!) Aston Martin Rapide S for half a price. The app's quality won't be compromised, but globalization and cross-border hiring will help reduce the total cost of software development.
So it's really up to you to decide how much to pay for your software development. Just be aware of the available cost reduction options and stay away from freelancers or cheap providers, as cheap products never look and work expensive and freelancers are very unreliable and not committed to your success.
Good luck with your application development!