How Much Does It Cost to Build an App?

Written by Reinder de Vries on May 19 2020 in App Business

How Much Does It Cost to Build an App?

How much does it cost to build an app? In this article, we’ll discuss the costs of app development and what factors determine the cost of building an iOS app. Whether you’re buying or selling – here’s how you can get a good price for your app.

Here’s what we’ll get into:

  • How your app’s features affect how much the app costs
  • Why you should actively engage an app developer while making a budget
  • How prices differ between freelancers, dev shops and in-house developers
  • Why an app’s price depends on who you hire for your app development project
  • Development costs you need to consider, such as updates and maintenance

Ready? Let’s go.

  1. How Much Does It Cost to Make an App?
  2. App Costs: Freelancers vs. Dev Shops vs. In-House
  3. How Features Affect an App’s Costs
  4. App Development Costs to Consider
  5. Further Reading

Author’s Note: Since 2009 I’ve built a few dozen iOS, Android and web apps for my clients. I’ve been involved in app development projects ranging from $5.000 for a prototype, to $500.000+ for multi-year RFP’s. What we’re discussing here in this article is based on my experiences as a professional software developer.

How Much Does It Cost to Make an App?

It’s the ultimate question if you want to have an app built. How much is this app going to cost? Any decent developer or agency will tell you: it depends.

But… depends on what, exactly? A few factors an app’s cost depends on:

  • The complexity and size of the app’s features
  • Does the app need to integrate with any 3rd-party services?
  • Whether it’s an offline-only app, or if it’s cloud-based
  • Do you need an administrator environment or back-end access?
  • iOS versions, device models, backwards compatibility, etcetera

On top of that, many app development projects require additional services, such as graphics design, UI/UX design, prototyping, user testing, and input from subject-matter experts (think chef, for a recipe app).

How much it costs to make an app also depends on who is going to develop it. The same app costs differently depending on who you ask. A small dev shop might charge more than a freelance iOS developer, but that higher cost comes with advantages.

Your geographic region matters too. The cost of living in North America is typically higher than in some European countries, which also factors into the price you pay for app development services. This is why app development is often outsourced to countries with a lower cost of living.

Lastly, how much an app costs also depends on culture. A prototype built by a sole developer may be “cheaper” than that same app built within a corporate organization. You might pay more for an identical app built by a prominent or popular agency. It’s counter-intuitive, but some corporations will not consider a quote or tender (RFP) below a certain price – even when the proposal is better but cheaper than the alternatives.

Before we continue, there are two principles you need to understand:

  1. The price of a product or service is based on its value, not on its Bill of Materials. A $1.000+ iPhone costs about $370 in materials. Do you pay a premium for the Apple logo? No. People pay more for an iPhone, because they tell a story to themselves about what that iPhone means to them. If the value they place on owning an iPhone is larger than $1.000, getting one is a steal. This is why pricing and buying decisions are irrational.
  2. There’s no such thing as a “market rate”. The “market rate” makes freelancers and businesspeople feel safe. If everyone charges roughly the same price, it must be a good price, right? Every iOS developer, dev shop or agency works differently though, and quality should be reflected in the price they charge for app development services.

Let’s move on!

Just so you know, monetary values listed on this page are in US Dollars (USD).

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App Costs: Freelancers vs. Dev Shops vs. In-House

The cost of app development depend on who is going to build your app. Let’s discuss how that works. We’ll differentiate between:

  1. Freelance iOS developers
  2. Small dev shops and agencies
  3. In-house development

In-house development
Making an app in-house is undoubtedly the most expensive of these 3, even though development shops and agencies probably charge a higher price for an iOS development project. Wait… how’s that even possible?

When you hire and employ a software developer in-house, you have to pay them a salary (obviously!). App developers are currently hired at a premium, because demand outstrips supply. On top of that, you’ll need to provide a workspace, pay taxes, pay for insurance, etcetera.

Depending on your geographic location, a good in-house developer costs between $50.000 and $150.000 yearly. Once you’ve found an app developer, you’ll want them to stick around for as long as possible, possibly offering them a contract for an indefinite time period. This makes the cost of building an app in-house an expensive option.

Development shop or agency
Another way of developing iOS apps is outsourcing development to a development shop or agency. A dev shop has hired their own development team, and provides iOS app development as a service. Their services are typically priced hourly or per-project. Typical costs of an app, built by a dev shop, range from $25.000 to $100.000.

When outsourcing with a dev shop, the costs of app development are affected by the features you want to built into an app. We’ll discuss how in the next section. If you end up hiring a dev shop, it’s important that you define a clear project scope.

Freelance/sole iOS developer
Hiring a freelance iOS developer is a great option for small-to-mid scale apps with a clear project scope. You can outsource to a local developer or work with a remote developer from around the globe. You can potentially benefit from geo-arbitrage by hiring a developer who’s in a different region. You can find developers for hire via platforms like Upwork, Toptal, Freelancer or Codementor.

The price ranges, skills and app costs differ greatly between freelance app developers. It’s smart to hire a developer with a good track record, and optionally hire them for an initial paid try-out project first. Depending on the iOS developer, a prototype app can cost as little as $10.000. Larger, more complete apps can easily cost between $25.000 and $50.000.

Now that we’ve had a look at different ways of outsourcing app development, let’s discuss how the features factor into a app’s costs.

You can find detailed overviews of developer salaries and fees per country on StackOverflow and PayScale.

How Features Affect an App’s Costs

It’s a simple rule: the more features you want, the higher the cost of the app. In general, more complex features take more time to build, and as a result the cost of the app is higher.

The biggest obstacle here is that you, the person who hires the app developer, may not have a complete or accurate idea about how much time it takes to build a particular app feature.

While it may sound easy to add a Login/Signup UI to an app, depending on the back-end or webservice APIs your app uses, this can be quite a complicated task. Moreover, the developer who takes 4 hours to build this feature might not do as good a job as the developer who takes 4 days.

This characteristic of app development projects is what makes it so difficult to estimate fixed-price projects accurately. It’s also a difficulty in working with developers you don’t yet know, e.g. you don’t know the quality of their work and how they price their services.

It’s a smart idea to get to know your developer or team of choice prior to signing off on an app project. It also pays dividends to outsource any future app projects to a developer or team you’re familiar with. It’s a win-win when you both invest in your relationship, which affects the costs of (future) apps.

Did you find a potential developer or team? It’s a smart idea to start with a discovery phase. You set up an initial meeting with the developer (or team) and walk them through your requirements for the app.

Your developer has the opportunity to comment on your ideas, and help you decide which features are worth keeping. A good developer will be able to explain to you what goes into building a particular feature, so together you can decide what features to keep or discard.

Based on this discovery meeting, the developer can estimate how much the app costs, create designs or mockups, and provide you with a project quote. You can then negotiate the quote, accept it, or take the project somewhere else.

A skillful, trustworthy developer (or agency) will charge for this initial discover phase, because they’re providing you with valuable insights. You know what they say about free advice!

App Development Costs to Consider

The cost of building the app isn’t the only cost associated with your project. Depending on your app project, app costs can also include:

  • Maintenance costs, i.e. updating an app continually for software and security updates and iOS/iPhone upgrades
  • Ongoing costs, such as subscriptions for webservices, 3rd-party tools and usage-based APIs
  • Costs for licenses and compliance, i.e. a privacy policy at least, or things like PCI DSS for data security

On top of that, you may want to continually expand your app, and build new features for your users, which affects the total price of the app. It’s a smart idea to start an app project with a fixed scope, and once that’s built, continue building the app with a sub-project per feature.

It’s important you ask a developer or team up-front about additional costs associated with the app. You’ll need to pay for the $99/year Apple Developer Program, for example. If your app uses a paid 3rd-party API or SDK, like Google’s Cloud APIs, you may need to pay for usage beyond their free tier.

Most apps these days rely on a cloud-based tech stack, and they aren’t free. The basic plan for Firebase costs $20/month, and a simple DigitalOcean virtual private server (for back-end hosting) starts at $10/month. Depending on the amount of users your app has, these services can costs hundreds or thousands of dollars a month.

It’s a smart idea to investigate these cost factors up-front, so you can choose a vendor with a good balance between price, quality and ease of development. For a simple app, it’s likely cheaper to use a ready-made cloud back-end provider such as Firebase, compared to building a back-end infrastructure from scratch.

A good, skillful developer will be able to guide you through these decisions, and help you understand how they affect the cost of the app project.

Further Reading

Before you move on, let’s do a quick recap. Here’s what we discussed:

  • The cost of app development mostly depends on the app’s features
  • The same app project costs differently depending on who you ask
  • App prices are based on features, value and culture
  • Consider additional app development costs, such as maintenance

We’ve also discussed a few rough ball-park costs of apps:

  • Freelancer/sole app developer: $10.000 to $50.000
  • Employing an app developer: $50.000 to $150.000 yearly
  • Dev shop or agency: $25.000 to $100.000 (and up)

Is building an app cheaper or more expensive than you anticipated? Whatever the case – in this article you learned what factors affect the cost of building an app. And you can always learn iOS development yourself!

Want to learn more? Check out these resources:

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Reinder de Vries

Reinder de Vries

Reinder de Vries is a professional iOS developer. He teaches app developers how to build their own apps at LearnAppMaking.com. Since 2009 he has developed a few dozen apps for iOS, worked for global brands and lead development at several startups. When he’s not coding, he enjoys strong espresso and traveling.

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