How much does it cost to create a mobile app?

The whole world is currently full with 5.135 billion mobile phone users. Every smartphone has an average of 80 apps installed. Forty of those are actually used each month, with users spending two hours each day. This constitutes a 7:1 ratio of time devoted to mobile apps in relation to web browsers. This is just part of the information given by Hootsuite. In the future, these numbers could be multiplied. In 2021, the number of downloads for mobile apps is estimated to exceed 350 billion a year.

To whom should we entrust the creation of our mobile app?

Such big numbers attract companies to invest in their own mobile apps. This causes an increase in the competition on the market. It’s quite crowded now, and the mobile market is only going to puff up. According to Statista, in Q3 of 2018, Android users were able to choose from 2.1 billion apps. The number is just a bit smaller for Apple App Store, with slightly above 2 billion available apps. On the one hand, we are dealing with a great potential for investment, and on the other, great competition. The overarching priority has become to step out from this big crowd, and to do it, one must actually stand out with something. This may be a great idea or a certain function performed better than the competition and entering the field in a specific niche. And this is where we cut to the chase. Preparation before entering the market is key.

If we are ready to invest several or even several hundred thousand dollars, we cannot cut our assumptions down to 3-6 sentences and hope that the external company or freelancer will expand the idea for us. The right market research and a thorough, written plan is the basis for action. Before we even think about sending an enquiry to anyone, we ourselves should answer a series of questions (which I will discuss later) and estimate the scale of the project.

Choosing the right freelancer to create a mobile app is a time-consuming, not to say breakneck task.  All you need to do is type in “freelancer mobile apps” into Google and browse the results to see for yourself. A single person is most often not able to cover a more complicated project which would additionally be dedicated for various platforms. This is obviously the cheapest option, but the most risky, as well. If we are searching for somebody to create a small app, that is supposed to operate with basic functions, does not require a complicated graphic interface and if we are not chased by deadlines, that is when we can take such an option under consideration. An example may be an app for registering patients in a dental office or a program for planning schedules in a small company, prepared having specific devices in mind. Entrusting such a project to a freelancer, we do not risk financial loss due to possible delays or accidental leakage of our idea to the world. However, it is always worth asking for a portfolio and references beforehand and choosing a person who has successfully created similar apps in the past.

For bigger projects, it would be advisable to reach for the help of an agency of a bigger developer company. A typical team working on a mobile app consists of 4 persons, which in most cases is enough to release a 1.0 version of our program within 4-6 months. Right, version 1.0 is just the beginning of our app’s path. The thing with digital products is that they are never quite completely finished. Usually, agencies suggest technical support after introducing subsequent updates. This is necessary if we want to develop our app in the future. Some functions may require fixed monthly payments (e.g., using external GPS maps). The budget should be planned according to the product’s life cycle.

What factors influence the cost of a mobile app?

Up to now, this text has not covered any specific numbers or price brackets, and this is for a very simple reason - the cost of creating a mobile app depends on many, many factors. First, we must decide on the type of app we would like to create and its purpose. This is the most obvious aspect determining the production cost. The simplest apps can work on their own, while more complex projects will surely require constant access to a server. This means that our app will have to communicate with databases. Application Programming Interface or API makes it possible for systems to connect with databases.  API libraries are the core of the app and the most expensive, and at the same time crucial, element. These are not the only aspects that have an impact on determining the type and purpose of the project. For example, a business app may not require visual bells and whistles, which will allow us to save on the artwork. Or quite the opposite, our goal will be to create a game, which might be linked with the need to hire a specialized developer team and buckle up for a longer production time. Regardless of our goal, we should nevertheless take care of the aesthetic design and the best user experience, or UX possible. . . And never try to save in this department. Users are currently very demanding, and another company may be quick in offering them more convenient solutions.

Once we establish the app type, we must define the target group and the market to which we would like to release our software. This is linked, first and foremost, with choosing the platform and allocating the interface in a specific language. Android smartphones are the most popular in most countries, but the United States, Canada or Japan are the biggest fans of the iPhone. When choosing the target platform, we should also be aware that the cost of creating an app exclusively for Android might by more expensive relative to an iOS-dedicated app. This is due to the standardized technical specification, a larger number of various devices and operating system versions. Because of this, the app might not load correctly on some tablets and smartphones, which may lead to users’ irritation, and negative ratings later. More time will be required for testing, and our budget might suffer due to the need to patch defects in our app.

The case will most often be that we will want to target our product to the global market. To reach the widest audience possible, it is worth releasing your app to both systems and considering an English version. As far as the location is not really that great of a cost (it is only during testing that we should pay close attention whether all commands sound and look as they should), multi-platformism may increase the costs of production even twofold. Depending on the accepted objective, we might decide on a native or hybrid app. An app dedicated to a specific platform may be more advanced and efficient. With a less complicated structure, it is worth choosing a hybrid app. This will lower the production costs and facilitate the introduction of fixes in the future. It is also important not to overlook the need to pay a fee for releasing our app on both platforms. Fortunately, these are not large numbers. Google Play charges a one-off fee of 25 dollars, and it costs 100 dollars a year to maintain an active developer account in the Apple store (regardless of the number of releases). A low-price threshold is a fact, that we will have to share our income in the future. Both stores charge 30% of all generated income and will transfer the remaining 70% to our account.

This is where we reach the most interesting stage, that is – making money. But before our account is overflown with incoming transfers from satisfied clients, we must slim down our budget a bit more. Why? The most popular apps on both platforms are free. And if they are free, then their popularity must be monetized in ways other than their direct purchase. The most common solutions are internal ads and microtransactions. The latter make it possible to buy virtual goods, add additional functions or remove ads from the app, increasing comfort of use. This means that developers will have to code proper mechanisms.
Other factors that impact the cost of creating a mobile app are: user registration method and profile management, integration with social media, securing clients’ data, push notifications, geolocation function and tests (the more complicated the functionality, the more meticulous they should be).

Where to search for a mobile app developer?

According to the above, the greatest part of the mobile app’s budget is dedicated to development and later technical support. It is therefore the easiest to calculate the cost of creating such an app with hourly rates, which vary depending on the country. USA coders earn from 50 to even 200 dollars per hour. Taking into account that even the simplest apps might require 200 working hours, and in extreme cases may even exceed 2000 hours, the budget should be adequately large. Due to the above, Western companies often search for savings and hire IT specialists from other parts of the world (the so-called offshore/nearshore software developments). The average hourly wage for Central-Eastern Europe is around 25-100 dollars.

This makes sense, especially that countries like Poland do not fall behind from other EU members and there are no larger cultural differences, with many specialists speaking advanced English. But this is also not the cheapest option. In Asia, in countries like India or Vietnam, the rates do not exceed 30-50 dollars per hour. But it is not always worth deciding on the cheapest contractors. Before making a choice, you must diligently browse the history of your possible business partner.

Product ready for the market – what does that even mean?

Let’s assume that you have a great idea, it might be an Uber-like revolutions, but you are not able to estimate it in any way. After all, you are an innovator and you cannot check how the competition is doing. Your company does not have to invest hundreds of thousands of dollars to measure the interest in this service. As I’ve mentioned before, work on a mobile app practically never ends. Minimum Viable Product (MVP in short), is the minimal state of product that makes it possible to introduce it to the market. MVP (Minimum Viable Product) production of a mobile app focuses on ethnic functionality, and its release allows to measure demand. This does not mean that such apps are low quality. MVP (Minimum Viable Product) is a fully operative app (but incomplete by default). Similarly like in the case of all apps, we should take care of its functionality, design and UX, whereas all that is not key to its correct functioning should be postponed for later. On top of that, it is the users themselves that will put you on the right track with their behavior in the app and their comments. This way, you can give the users exactly what they expect much faster (and cheaper), and the production costs will lay out over time.

So, what is the cost of creating a mobile app?

If you are still bothered by the question asked in the title and are ready for some specifics, but are already aware of all of the above-mentioned variables, we may now give it a go and try to answer. Mobile app valuation most of all depends from its complexity and working hours required to finish. The minimum budget is 1,000-5,000 dollars. This is where we can expect nothing more than the absolute basis, meaning a simple app, often even without a graphic design, working on its own on one platform. If we use the services of a small developer group of several persons from Central-Eastern Europe for a more expanded project, the prices will start at 20 thousand dollars, but there is practically no upper limit. It is around 100 thousand where we can count on the app to be in two language versions with user registration, internal payments, tools for statistical analysis, responsive adjustment to various devices, multiple language versions, dedicated design and UX, integration with API, social media and selected services/functions (like Google Maps or QR code scanner). But according to a report by Kinvey basing on the opinion of information directors, the developing period often exceeds 7 months, and companies dedicate an average of $ 270.000 on this target. The greatest corporations can boast with even larger budgets exceeding $ 500.000. For example, Uber started off from the level of 1.5 million.

For example, Uber started off from the level of 1.5 million.

And keep in mind that we are still talking about the first version of the program. In each of the cases discussed, we must add at least as much again for ongoing application support and its development.  If we top this up with possible marketing costs, it becomes clear that creating a mobile app is no game for individual persons. Still, it is very lucrative, with a great return on investment potential.