How to Estimate App Development Costs (Updated for 2017)
Thinking about building an app? Concerned about app development costs? While it’s true apps can be expensive, they don’t have to be. A lot depends on what you create and how you create it. So before you jump in, do a little homework — it’s pretty easy to figure out your own cost estimate.
In addition to our powerful app building platform, BuildFire has an experienced mobile app development team. Let us share what we know so you can estimate your own mobile app development costs.
Understanding What’s Behind App Development Costs
While every project is different, there are some common variables, like app complexity, mobile platforms (Apple, Google, Windows, etc) and the location of the development resources. Understanding these variables is key to estimating costs, so let’s take a look at each.
Broadly speaking, app complexity can be divided into four categories: 1) Simple, 2) Complex, 3) Large enterprise apps, and 4) Gaming.
Understanding in which category your new app idea falls into is the first step in estimating your overall app development costs.
Simple apps have a limited number of screens and may connect to an API in order to retrieve data. These apps don’t typically support user profiles, although they often let users share their content to social media. As a general rule, simple apps will generate limited amounts of analytic data.
By our estimates, simple apps take about 35 hours to design and 400 hours to develop. App development costs run between $59,000 and $239,000 depending on the number of features and how you choose to build them.
A single app developer or small team can create simple apps in less than 3 months.
Complex apps have more screens, sometimes as many as 8 or 10. They’ll connect to at least one API, and routinely make use of location data. Often every user has a profile, and their content can be available on multiple devices. They may offer in-app purchases or a shopping cart. Complex apps usually can collect and report a full range of analytics, and have an administration console that lets you moderate and monitor content and usage.
We estimate that complex apps take roughly 70 hours to design and 490 hours to develop. App development costs run between $80,000 and $330,000 depending on the number of features and how you choose to build them.
Complex apps need a large amount of work by a designer, and are almost always developed by mid-size teams with a project lead.
Enterprise apps generally have more more than 10 screens, each very polished and professional. They may connect to multiple APIs, and sometimes offer other app developers their own API to call. Every user has a profile, and there’s typically a robust web-based user management console in place for administrators.
Enterprise apps can also moderate users, approving or deleting messages and content. They almost always have robust social media integration, and can collect large amounts of analytic data.
BuildFire estimates that enterprise apps take at least 140 hours to design and 800 hours to develop. Enterprise app development costs can add up to between $392,000 and $548,000, depending largely on the number of features.
It’s usually necessary to have a big team of developers, and sometimes more than one team is used. Designers will typically need to be experienced and able to work closely with the development team and management.
Mobile games usually have a handful of screens, including one with 3d acceleration that’s used to play the game itself. Many mobile apps connect with servers to report usage data and analytics. They they may be able to talk with multiple APIs, including custom ones. User profiles are standard, and are often formatted nicely and made public on the web.
Most mobile games use a full-featured administration suite to manage users, purchases, and in-game content. In-app purchases are standard. Successful mobile games need scalable code and infrastructure.
By our estimates, mobile games take about 350 hours to design and 1600 hours to develop. App development costs run between $270,000 and $833,000. Design and development costs can easily run much higher for premium games.
Mobile games need a large amount of work by multiple designers, media creators, and teams of experienced and specialized programmers. They’ll typically need a project lead and a handful of other managers who also lead teams of app developers and artists.
App development costs change with the platform you’re developing for, but the majority of apps get a multi-platform release. According to www.comentum.com, Android has about twice as many users as Apple, but Apple users spend twice as much on apps.
Although it’s slightly more labor-intensive to develop for Apple, you should expect your app’s IOS port to generate a bit more revenue in return.
Location of the Development Resources
Whether you’re hiring an agency or a freelancer, the location of the software engineer(s) can make a big difference to your budget. Offshoring the app development can result in significantly lower app development costs — cutting up to 50% or more off of the total price — according to the hackers and entrepreneurs at YCombinator.
But offshoring comes with its own set of challenges, and without solid program management, can be a nightmare. Look for a project manager with experience overseeing app developers from the location you’re offshoring to, every culture has unique strengths and differences.
Our ‘BrandBuzz’ Sample App
OK, so much for theory. How do we apply all this information to come up with a realistic cost estimate? Let’s call our app… ‘BrandBuzz.’
We want BrandBuzz to let users take a picture with our product and post it to social media. The photos should also show up on a feed within the app, so other Buzzers can like photos, comment, and share them with their own social networks. It should be able to send push notifications and communicate with the Google Maps API so users know when another Buzzer is close by.
Let’s add a BrandBuzz administration console to give our social team the ability to delete inappropriate content and moderate comments. We’ll also want to collect all of the user analytics so we can target our advertising.
With that in place, let’s look at how much the BrandBuzz should costs to develop.
Choosing an App Developer
When you’re deciding who to hire to build your app, you really have three choices. You can hire freelancers, bring in an app-building agency that will deliver the project to spec, or repurpose programmers already working for you to build the app internally.
All three models have different costs associated with them, but each one can work well with the proper management and oversight.
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Developing Apps with App-Building Agencies
Hiring an app-building agency is the easiest, but most expensive way to built an app. Agencies have the infrastructure in place — they have access to project managers and user experience designers, and qualified and capable programmers.
In terms of management, skill and resources, most agencies have an edge. It’s possible to find very skilled freelancers but they need to be actively managed. If you lack the time and software project management experience, the Agency option might be your best bet. Agencies write apps every day, their managers are usually top-notch, and they have designers that work with the programming team.
But expect to pay for the talent and convenience. In real terms, most agencies charge more than twice as much as freelancers for the same project.
Developing a simple app with an agency costs an estimated $171,000 to $239,000. A complex app would cost between $236,000 and $331,000. A full-featured enterprise app will average between $392,000 and $548,000. High-end mobile games cost $833,000 and up.
An agency could deliver BrandBuzz for about $236,000, since it straddles the line between simple and complex. These estimates are based on information collected by BuildFire using app-building agencies located in the United States.
Developing Apps Using Freelancers
Aside from in-house app development, the most popular alternative to an agency are freelancer(s). You’ll be able to find freelancers for-hire on sites like Upwork and Freelancer.com.
A word of caution, Freelancers have the highest rate of failing to complete a project. Selecting the right developers is critical and expect to spend more time and resources hiring and managing freelancers than you would an agency or in-house team.
Managing freelancers is an acquired skill and communication is critical. Hiring the wrong freelancers can derail an entire project and set app development back months or more. Accept from the onset that mistakes will be made.
But if you are on a tight budget, this is likely your best option. From the onset of the project, make sure you clearly define exactly what you want from them and split your project into small discrete phases. Freelancers can also be brought in to add features and supplement in-house teams with good results.
The cost of a simple app using freelancers is between $59,000 and $83,000. A complex app costs between $80,000 and $113,000. A large enterprise app can range from $392,000 to $548,000. Mobile games built by freelancers cost at least $270,000 and can run more than $378,000.
Building BrandBuzz with freelancers will cost around $83,000. These estimates are based on information collected by BuildFire using data from UpWork and other freelance development portals.
Developing Apps In-House
If your business already has programmers on staff, you might consider building it in-house. It depends on how tightly focused your team is on their specialty, but talented programmers will pick up app development fast.
Some non-technical businesses may also consider hiring talent. However, management and oversight is key to success. For those lacking the time and skill for such oversight, an agency is usually a better fit.
For larger firms that already have IT management in place the task is easier. It may be as simple as adding a new team member to fill knowledge gaps, and it helps to use an app builder like BuildFire to make app development faster.
App development costs for using an in-house team are roughly between using an agency and hiring freelancers, depending on their pay and experience.
App development costs for a simple app, built in-house, run an estimated $103,000 to $144,000. A complex app would cost between $142,000 and $198,000. A polished enterprise app will average between $234,000 and $327,000. High-end mobile games cost $509,000 and can run more than $712,000, but a lot of that depends on the ability of your app developers to adapt to game programming.
If we were using in-house talent to develop BrandBuzz, it will probably cost about $144,000. These estimates are based on information collected by BuildFire using average salaries for programmers and designers.
BrandBuzz App Development Costs
Let’s summarize our options.
We can expect to spend about $236,000 on an agency to develop BrandBuzz. A team of freelancers will do it for about one-third the cost (if they’re properly managed), and in-house talent splits the difference.
Calculators for Estimating App Development Costs
If you’re in the initial stages of app planning, one tool you’ll run across is an online calculator. A lot of agencies put these out as a sales tool. So, how does a calculator stack up to our BrandBuzz estimates above?
We fed our BrandBuzz requirements into a few of the more popular calculators. The results were quite telling. Even for rough estimates, they just aren’t reliable.
The difference between the most and least expensive estimates is an outrageous $405,000. We have no idea what to make of Newsignature. Otreva and Kinvey were closer, but undershoot our app estimate by tens of thousands of dollars. Oozou is ridiculously low.
The three lower bids likely reflect the sales pressure to provide a low initial quote. These calculators are built by the marketing department to collect your email address and get into the agency’s sales funnel. If the price is too good to be true…
We really think you should trash the calculator and reach out to a professional instead. Talk to us for an honest and accurate quote.
App Maintenance Costs and Support
One thing that most app developer websites won’t tell you is that it’s important to plan for ongoing maintenance costs and support.
Using information from formotus.com, we can estimate it will cost about $12,500 per month to actively maintain, support, and update BrandBuzz over two years with an in-house team.
As a general guideline, you should expect to spent about twice the amount of your initial app development costs over two years to maintain and update your mobile app.
Pay Less and Get More with BuildFire
If you’re looking to build your own mobile app with an agency, freelancer or in house team, you can cut down production time significantly by using BuildFire for your mobile app.
All of of the features we mentioned in the BrandBuzz app — and a lot more — are ready to go out of the box with the BuildFire platform. Even if you need completely custom features, they can be added to the existing features we have today, making it so you only need to focus on building the features that are unique to your business.