App Development Costs: The Ultimate Guide to App Budget by App Type

Analysis

When we published our massive review on how much an app costs back in 2015, we had no idea it would become the top resource on the web. Two years later, that piece is still considered the definitive resource in our industry. It’s because of its popularity that I feel compelled to revisit this subject. Additionally, doing so will allow for some fresh perspectives based on what's changed in the app industry as well as another way to look at the topic.

TL;DR

Typical buildout costs by app type.

Note: There is some overlap of costs between categories. Obviously these breakdowns should be used for general guidance only. Specific costs will vary based on the complexity of the features implemented. Each range is focused on creating an app from start to finish on a single platform.

The last time I addressed this question, I reviewed costs through two big lenses: data for early-stage ventures and from agencies. The first pulled from what venture capitalists suggested startups raise and known funding rounds for app-focused companies. The second source came from what we saw through industry data and at Savvy Apps itself.

Both of those broader lenses are still useful ways to look at app costs, but costs can additionally be broken down by app type and the features associated with them. Also, two years in technology is a very long time. So, we will start by looking at what's changed. We'll then move on to looking at app costs based on the different kinds of apps in the market.

What's Changed in the App Industry Since 2015?

We're living in an age where we can order groceries, turn on the lights in our house, or get in a workout from the convenience of our phones, tablets, or other devices. Apps are a part of our everyday lives. They are increasingly giving us more free time or vying for more of our attention, depending on how we choose to use them. With that, here are some of the more important changes since we published our app cost article in 2015.

User Demands

For those of us building apps, there's an increasingly larger burden on us to meet the expectations of our users. We've outlined the considerations of what makes a great app in the past, which are more relevant than ever. Users simply don't have the patience for apps that are overly complex, slow, or buggy. The best apps are personalized, highly contextualized, and touch human emotion. Meeting those user expectations is significantly challenging.

Tools

Thankfully, the tools we use continue to get better and more app specific. For example, Sketch lets us design more efficiently with its focus on creating user interfaces. Marvel helps us craft better prototypes with it being specifically for apps. Swift has been a revelation for the Apple ecosystem and has expanded developer interest considerably. Android Studio and now Kotlin are doing the same for Android apps. Firebase and yes, even Parse, now as Parse Server, helps developers build app-focused backends to bring apps to the market more quickly.

App-specific tools such as Sketch have gained popularity since 2015.
Similarity of Platforms

We've also chronicled how Android and iOS have become more and more similar in their approaches. The "Android tax," as we've referred to it in the past, no longer exists. Generally, Android and iOS apps can now be built with the same quality, with comparable timelines, and budgets. While that doesn't necessarily mean we suggest building platforms in parallel, it's a huge relief for people creating apps.

Further Separation of Quality

Although the market has even more options to build apps now than in 2015, there's also clearly more of a distinction in quality. The best app firms and app developers have further honed and distinguished themselves. They have more awards, stronger portfolios, better team members, and more specialized skills. The tools available have made it easier to build apps though, so there's also many more mediocre or low-quality options to build your app.

App Cost by App Type

When building an app, features are one of the big drivers of costs. A feature is any functional element of an app that has a meaningful impact on the experience. A feature can be as small as a button on a screen or much more complex like a machine-learning algorithm.

Features in app development are not that different than adding options to a car or house. The more options selected and the more extensive the customizations, the higher the costs. Using that analogy for context, let's take a look.

Note: This article will not include considerations for costs by independent developers or offshore firms. As I have written about cost differences in previous articles, those costs vary widely. Instead, this app cost resource focuses on what it would take to have a quality team of professionals build different kinds of apps. That could be done in-house, by building your own team, or by contracting a third party agency like Savvy Apps.

App Costs for No Network Access

We define "standalone" apps as apps without server components or apps that need no network access to function. They are not very common today due to the pervasiveness of network connectivity and lower data costs.

Apps in this scenario would be able to fully function without any sort of network connection. Historically, examples of standalone apps might be your settings app or the camera app that comes with your device. Even today though, those apps usually have some interaction with the network. For example, you can share a photo from your camera via messaging.

  • Type: Standalone
  • Cost: Less than $50,000
  • Examples: Calculator, Clock, Camera, Settings

App Costs for Data Consumption Only

Today Weather consumes data from third-party APIs but has no authentication.

The next kind of app involves apps that need network connectivity but solely consume data. That is, they don't need any sort of authentication or login to work. Again, these kinds of apps are not as common today, but they still do exist.

Examples of these types of apps might include the stocks or calendar apps that come with your device. Third-party developers, however, build much more extensive versions of those apps that include logins, syncing, and other features. Keep in mind that the data-consumption apps may require a lightweight server aspect to be built as well.

  • Type: Data-consumption only
  • Cost: $50,000 - $100,000
  • Examples: Calendar, Weather, Stocks

App Costs for User Authentication / Login

Users can browse the Bible app or log in for advanced features.

Apps begin to get more complex—and costly—once user authentication is involved. The main reasons for that are all the other expectations that come with user authentication. Typically, they include interacting with data (e.g., favoriting an article), syncing data across devices, push notifications, and perhaps collaborative features (e.g., inviting a family member).

Example apps might include ESPN or the Bible App. Both of those apps follow the best practice of being able to use them without user authentication. They become more useful, however, once a user account is created. There are many more apps that could fall into this category but will be reserved for the next one.

  • Type: User Authentication
  • Cost: $100,000 - $300,000
  • Examples: ESPN, Bible App, Google Drive

Costs of Social and Social Networking Apps

Many of the top apps today are driven by social features. This means that users interact with each other and each other's data, such as a text, photo, or video. They can also friend one another and otherwise create their own network. Hence the term "social network."

The kind of apps that fall into this app type are extensive. Facebook, Instagram, Snapchat, Twitter, WhatsApp, Pinterest, and YouTube are all examples. Remember that some of these apps have been worked on for many, many years. Thus, a v1.0 social app or social networking app will likely not offer all of the same features. For instance, Snapchat did not start with videos, filters, or their "Stories" functionality. A social app would, however, include user authentication, friending, favoriting (or other data interaction), some sort of messaging, and comparable "baseline" functionality.

Although not explicitly mentioned above, dating apps can also be included in this category. Dating apps would have the additional features of being able to more extensively search, filter, and interact with profiles, a matching algorithm, and advanced permissions that limit interaction until a match occurs.

  • Type: Social Networking, Dating, "Matching"
  • Cost: $150,000 - $500,000
  • Examples: Facebook, Snapchat, Tinder

Costs of Ecommerce Apps

Ecommerce apps include many of the same features as apps that require logins (user authentication) or social networking features. They go a step further, though, in two ways.

Ecommerce apps require integration with inventory systems, as well as payment processing.

The first is that they will need to be powered by a product catalog. Many times that already exists and an app will just leverage APIs or web services to pull back products. If it doesn't, however, it will require either a custom buildout (beware!) or leveraging platforms like Shopify, Magento, or comparable solutions. The strength of these tools include providing the administration interface to add new inventory, APIs or SDKs, ways to store items in a cart, and similar features. The downsides are that you'll be limited by their workflow and customizations.

The other aspect that separates the cost of ecommerce apps is the payment itself. As users add products, they'll need to check out and perform a payment transaction. Some of the tools above bundle in payment solutions. Alternatively, you'll have to integrate with payment gateways like Stripe, Braintree, Authorize.net, etc. Ecommerce apps that fall into this category include Amazon, Stitch Fix, Honest, and many others.

The costs in this case assume that an ecommerce system is either already in place or an off-the-shelf system is used. The variability of costs results from how complex an existing system might be, as well as the extensiveness of the product catalog. Not included in these costs would be the required shipping logistics.

  • Type: Ecommerce, Transactional
  • Cost: $200,000 - $1,000,000
  • Examples: Amazon, Stitch Fix, Honest

Costs of On-Demand Apps with Two Versions

As I mentioned back in 2015, we often received requests to create an "Uber clone.” Uber, Instacart, Postmates, and apps like them are all considered "on-demand" applications. They allow users to immediately fulfill a need or want, whether it's hailing a ride, getting groceries, or having a meal delivered.

Instacart needs apps both for shoppers and customers.

On-demand apps incorporate many of the elements seen in apps with logins and social features. Like ecommerce apps, they also include a transactional component, because users need to purchase goods and services. Unlike social and ecommerce apps, however, on-demand apps essentially require two completely unique user experiences. For example, an Uber driver needs advanced mapping and routing functionality while a rider doesn't. Similarly, the driver doesn't need to do a payment while a rider does.

For this reason, on-demand applications can get very time intensive. Consider building on an on-demand platform on both iOS and Android. A typical app on a single platform would require one experience to be designed. In the case of an on-demand app on two platforms, four would be required. That's one experience for each user in the system (i.e., two per platform) plus each platform (i.e., four in total). On-demand apps also often require a number of administrative interfaces. The only way to reduce the cost of an on-demand platform is to streamline the typical feature set included. For example, you could remove in-app payments or administrative interfaces while doing market validation.

  • Type: On-demand
  • Cost: $100,000 - $1,500,000
  • Examples: Uber, Instacart, Postmates

Costs of Two-Sided Marketplace Apps

Apps that require a two-sided marketplace tend to share many of the same characteristics of on-demands apps. In fact, on-demand apps are actually a more specialized version of a two-sided marketplace.

A two-sided marketplace app or platform consists of supply and demand sides. The business is able to bring value to both sides, which is a direct result of network effects. That is, the suppliers are attracted to the growing stable of demand and vice versa. Therein lies the problem: scale.

Two-sided market platforms need scale on both sides of the equation. If Angie's List, for example, has no electricians available in Washington, D.C., then people there won't use their app. Without a significant number of people needing services in that location though, their platform won't attract electricians to join.

Because two-sided market apps lack the specificity of on-demand apps, usually more features need to be built. More significantly though, it's much harder for a company to build each side of the market. Uber, for example, is focused on driving. Angie's List, on the other hand, has hundreds of different kinds of service providers. If it wasn't clear from the examples, both on-demand and two-sided marketplaces also have a geographic component. This means that they often start in one area or a subset of areas like Uber did in San Francisco.

  • Type: Two-sided marketplace
  • Cost: $200,000 - $1,500,000
  • Examples: TaskRabbit, Wag!, Care.com

Costs of Internet of Things (IoT) and Hardware-focused Apps

Eero is a great example of a physical product that has an app counterpart.

Since 2008, apps have become increasingly more interconnected. IoT apps are one such instance. These apps generally focus on communicating with objects that exist in the real world. These objects could include a toothbrush, doorbell, medical device, lights, home assistant, or any other number of products.

Often you'll hear the word "smart" associated with the physical object when it is IoT-based. Instead of just lights, you get "smart lights." Instead of just a doorbell, it's a "smart doorbell." These kinds of apps require an initial setup via Bluetooth or WiFi, so that you can check your house while on vacation or start your coffee while in bed.

IoT apps often require fairly low-level interactions with firmware to control the hardware itself. They need ways to send commands and pull data, requiring close collaboration with whoever is building the hardware. They also may even require specialized ROMs or very precise device requirements due to being computationally intensive.

  • Type: Internet of Things, hardware-focused
  • Cost: $200,000 - $2,500,000
  • Examples: Automatic, eero, Nest

Concluding Note

The costs of apps continue to vary dramatically in the marketplace. That's why we keep providing data-driven resources like this one. Don't be surprised when you go to reference this article and a developer, company, your neighbor, or a person you just met on the street suggests, "Yeah, I can build that for a few thousand dollars."

What we're trying to do in providing these ongoing app cost resources is to frame the conversation for you. As noted earlier in this article, we're not suggesting that any of these different app types can't be lower than the lowest range shown or higher than the highest one. We are, however, trying to give you a sense for what a quality app built by seasoned professionals would look like.

Ken Yarmosh is the Founder & CEO of Savvy Apps. He's the creator of more than 20 featured apps, including an Editor's Choice selection and Starbucks Pick of the Week. An O'Reilly author, Ken regularly speaks about application design & development, as well as the future of technology at outlets ranging from Bloomberg TV to Google.

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