What is the cost of building a mobile app in 2020 and how to reduce it?



These days it’s difficult to imagine the world without mobile applications that have quickly become an essential part of our lives. According to the statistics provided by TechJury, there were:

  • 178 billion app installs in 2017
  • 194 billion app installs in 2018
  • The average consumer uses 9 mobile apps every day and 30 apps on a monthly basis

 

Aiming to automate manual business operations, improve communication with users, and increase sales, companies are investing huge resources in custom mobile app development. As all budgets are limited, it is reasonable to estimate the costs before starting the project. 

 

However, how do you estimate it if hourly rates of IT service vendors vary dramatically across different regions?

  1. What factors affect the final cost?
  2. How do you reduce expenses without a loss in quality?
  3. How much time does it take to create a mobile application?

In this article, we’ve prepared an ultimate guide that answers these questions.  Take a look!

 

How much does it cost to build a mobile app worldwide?

The cost of launching a mobile solution dramatically varies depending on its level of complexity, design elements, operating systems, and region (e.g., USA, Argentina, Australia, India, Eastern Europe).

 

Here are some interesting findings that will help you plan the budget of your software project:

  • Analysts at Clutch revealed that the median cost of making a mobile app is about $171,450 (at $150/hour).
    Therefore, the average development takes about 1,143 hours. 
  • Although the average price of creating a smartphone application ranges between $37,913 and $171,450, sometimes it could reach even $500,000 or higher.
    For example, when implementing complex functionality and outstanding user interface design.  
  • According to the survey, conducted by Clutch, a leading B2B ratings and reviews platform, the average minimum cost of making an app is between $5,000 and $10,000.
    However, this refers to very simple solutions that have only 1-2 features, several screens, and those that don’t require the integration of APIs. In most cases, a business needs a budget that significantly exceeds $10,000.

Hourly rates of programmers, QA (quality assurance) engineers, designers, project managers, and business analysts differ from country to country. The region you choose is one of the main factors that determine the development costs.

 

Here are 7 things you need to consider when creating an app by Virtual assistant services.

 

Have a look at the formula for calculating the price of delivering a smartphone application. 

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You can see the hourly rates of IT specialists in different regions in the picture below. 

 

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Let’s consider how much it costs to create an iOS application in the USA. The average hourly rate of an iOS developer is $100. Building a simple solution generally takes about 600 hours. 

  • USA: 600 hours x $100 = $60,000

So, the project budget would be approximately $60,000.

Now, compare it with making the same product in Eastern Europe, in a country such as Poland.

  • Poland: 600 hours x $45 = $27,000

Since the median rate for engineers here is $45, the price would be $27,000. The more complex the app is, the higher the final cost will be. As you can see, the difference is significant. 

 

How much time does it take to build a mobile app? 

As our practice shows, custom mobile app development takes between 3 and 9 months depending on the project complexity. If calculating in hours:

 

  • The creation of a Simple application that has only the key features needs approximately 500-700 development hours
  • A product of a Medium complexity requires 700-1000 hours.
  • The delivery of a Complex app with rich functionality usually takes 1100-1300 hours.

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Let’s take a look at how much it costs to write simple, medium, and complex mobile apps in different regions: the USA, Poland (as an example of Eastern Europe), and Western Europe.  

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As you can see, the price in Poland is much lower, though the quality is also high. This is one of the main reasons why the ITO industry is quickly growing in this country. 

 

We can help you compare the price of your App just right now.

Let’s arrange an introduction meeting for this.

 

What factors affect the cost of creating a mobile app?

Besides the project complexity and the level of developer salary in different regions, there are other factors that impact the end price. See the complete list below:

1. Location of an IT service vendor

The price of making your own mobile app largely depends on the location of a software development team. 

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2. The type of IT service provider

A business is not limited to only a custom mobile app development company or in-house experts. Another option is to hire freelancers, which offer lower costs. All choices have their associated advantages and disadvantages.

For instance, a third-party contractor assembles a team, which is tailored to your project considering skills, fields of expertise, and workload. 

You don’t have to spend time and resources on recruitment and onboarding.

 

3. The number of features and their complexity

This is one of the main things affecting application development costs.

A digital solution with 2-3 simple functions (e.g., the list of documents, user contacts, product description, etc.) will take less time than, say, a medium-complexity project that includes 4 and more features.

If your budget is limited, define the key functionality and start implementing it. 

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4. Selected operating systems 

Building a mobile application for one operating system is cheaper than making it for iOS and Android. 

  1. If the average cost of iOS or Android development ranges between $37,913 and $171,450
  2. The budget for launching a native solution on both platforms is about 2 times higher, or roughly $75,826 - $342,900
  3. You can also design a cross-platform app, which means the creation of one product for iOS and Android. 

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This is great if the primary goal is to make a simple digital solution, which is not intended to have a large number of users, for example, if it is designed to address internal business challenges. 

Now the market offers many cool frameworks such as React Native, Xamarin, and Flutter that allow designing apps that look almost like their native counterparts.

  • If you want to ensure the seamless user experience and engage consumers, go native. When deciding between an iOS and Android, consider what type of smartphone your targeted customers use. 
  • If the percentage is fifty-fifty or close enough to it, write one application for two platforms. The end cost will be higher but you will satisfy the needs of your audience.

 

5. Design complexity

The more screens and handcrafted components your mobile application requires, the more complex the design is, and ultimately the higher the end price will be. The software design process includes several stages: 

  1. Analysis of the project requirements
  2. Wireframing
  3. Prototyping
  4. User interface design

 

The hourly rates of UI/UX designers by countries (based on hourly rates indicated by companies on Clutch and GoodFirms):

  • Designers from the USA and Canada work for $50 - $150/h
  • In Australia, the rate ranges between $45 - $135/h
  • Design firms located in Western Europe charge $40 - $95/h
  • Poland (Eastern Europe) mobile app design rates are $25 - $50/h

 

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  • If you want to create a unique branded design to promote goods or services, we recommend focusing on developing a truly beautiful product.
  • If the main objective is to release a working solution for a company’s internal needs, create a modern intuitive user interface without complex customized elements. 

 

6. Team members 

The hourly rate of a senior engineer is higher compared to a junior specialist. The salary of a business analyst is generally lower than a developer with the same years of experience.

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Generally, the creation of a mobile app for iOS and Android requires the joint efforts of an iOS developer, Android developer, designer, QA engineer, project manager, and business analyst.

If the product a company needs to deliver is small, one person often fulfills the duties of both a business analyst and a project manager.

 

The cost of WhatsApp, Instagram, and Uber

WhatsApp

WhatsApp is an instant messaging mobile application owned by Facebook. As of February 12, 2020, the number of users is 2 billion worldwide (official WhatsApp Blog).

The app offers text and video messaging, allows making voice and video calls, as well as sharing photos, images, files, user locations, and more. 

 

How much time a software development team would need to build WhatsApp functionality (in hours):

  • User registration (82-99)
  • User contacts (40)
  • Chats (60-120)
  • Push notifications (65-90)
  • Voice calls (80-180)
  • Video calls (120-240)
  • Sharing of photos, images, docs, etc. (40)
  • Geolocation (55-75)
  • Setting adjustments (50-60)
  • End-to-end encryption (40-100)

So, the creation of a WhatsApp-like application will take between 632 and 1044 hours. 

 

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The required budget to build this functionality in the USA is $44,240 - $73,080.

However, the price can vary depending on the engineers’ experience. In accordance with Indeed, the annual salary of a senior developer in the United States is >$70 (without cash bonuses and social perks), of a junior specialist - $60. 

The company’s location also has a direct impact on the end cost. If you decide to outsource the project  Poland, you will need $18,960 - $31,320. 

 

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Instagram

Instagram is a photo and video-sharing social media application that was launched about 10 years ago. Owned by Facebook, the app is available in 32 languages. In the beginning, Instagram was a minimum viable product that had only one main feature—publication of photos. 

 

Now it has rich functionality that involves stories, various photographic filters, messaging, advertising, likes, comments, etc. Let’s take a look at how much it costs to build an Instagram-like app with the main features.



The key functionality and time required to develop it:

  • Account authorization (70-75 hours)
  • Profile creation and editing (50-55)
  • Photo sharing and customization (140-400)
  • Messaging (140-145)
  • Geolocation (50-55)
  • Push notifications (65-70)
  • User settings (100-135)
  • Search parameters (25-50)

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Calculating the overall time for building this functionality, we get 640 to 985 development hours, which is between $44,800 - $68,950 in the USA. That is without UI/UX design costs, which are not included in this estimate.

If you decide to outsource such a project to Eastern Europe, say, Poland, the price will be $19,200 - $29,550.

 

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Uber 

Uber started with building a minimum viable product. The first version served for connecting drivers with users and making payments. Due to this simplicity, the company raised investment and achieved success.

Currently, Uber is a world-renowned service that dominates a major share of the market. It has complex functionality that can be divided into features for drivers and passengers.

 

Features for passengers (in hours):

Features for drivers (in hours):
  • User registration (55-66 hours)
  • Car location tracking in real-time (100-120)
  • Selection of car type (20-60)
  • Cost calculator (40-80)
  • Automatic payments and their tracking (35-45)
  • Ratings, feedback (60)
  • Ride history (60-74)
  • Registration (50-64)
  • Status update (34-46)
  • Push notifications (36-46)
  • Navigation (40-120)
  • Reply to request (64-78)
  • Location tracking (70-84)
  • Booking history (54-64)

 

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Since the number of hours is 718-1007, the cost of creating an Uber-like application will be $50,260 - $70,490 in the USA.

However, you can reduce it. In Poland you will need a budget of $21,540 - $30,210. 

 

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How can you reduce the cost of making a mobile app?

Mobile application development is a complicated process that requires a lot of time, money, and effort.

Our team of project managers, business analysts, and engineers have prepared several recommendations that will help you reduce the costs of creating a mobile solution. 

 

1. Outsource a software project

Instead of assembling an in-house development team, turn to a third-party company. IT outsourcing is one of the best options to reduce costs without sacrificing product quality.

For instance, hourly rates of engineers in Poland are much lower than in the USA and UK. 

 

At the moment, Eastern Europe is becoming a highly popular destination for delegating software tasks (e.g., app development from scratch, system maintenance, migration to a new technology stack, user interface design, etc.).

In accordance with the "Software Development in Ukraine, Poland, Belarus and Romania in 2019" report, their joint annual revenue is over $13 billion. Furthermore, the market in this region is evolving 4-5 times faster than elsewhere in the world.

 

It is also worth noting that the primary reasons for outsourcing are not always just to save money.

Analysts at Clutch found that businesses mainly address their technical challenges to increase efficiency (24%), access expertise (18%), and free up the time of in-house specialists (15%).

  • Only 12% of firms said they hire third-party contractors to reduce the end cost, which is a quality parameter of outside IT professionals.

 

2. Create a detailed technical specification

Prepare a clear software requirements document, so that each team member has a complete understanding of what to implement and how.

This also allows the client and engineers to be on the same page, spend less time on communication during the project, and make fewer changes in the requirements. The more details you provide, the faster the product development will be.  

 

A specification provides details on numerous aspects, including:

  • System behavior from the user’s point of view (user requirements).
  • A system in terms of business: the needs that should be met (business requirements).
  • Product implementation and functioning: database structure, the interaction between the system components, etc. (functional requirements).
  • System specifications: project infrastructure, software versions, etc. 

With a detailed technical specification, it’s much easier to calculate the mobile app development time and therefore—budget. 

 

3. Turn to a trusted app development company

When looking for a reliable company, pay attention to ratings and client testimonials.

Platforms like Clutch and GoodFirms verify each customer’s review submitted to their websites. They also create and constantly update the lists of top firms in various categories. 

 

Choose engineers who have high expertise in the necessary field and technologies. Say, you want to build an Internet of Things application, seek experts who have helped other businesses deploy IoT solutions.

To find a trusted contractor, read our “Ultimate guide on how to choose the right custom software development company for your project”.

 

4. Develop an MVP

We recommend you start with building an MVP (Minimum Viable Product). This is an application that includes only the minimum functionality, which is necessary for completing the main task. For instance, booking a hotel, planning daily activities, or sharing healthcare data with a doctor. 

 

The MVP development approach is well-recognized and widely employed due to its benefits. The idea behind it is to collect user feedback, measure reaction, and improve or extend the product so that it meets customer needs and expectations.

Airbnb, Amazon, Uber, Instagram, Dropbox, Twitter, and many other popular apps were MVPs.

 

Launching an MVP is a great way for startups to check the concept, showcase it to investors, and attract early users. As a result, you not only save costs but also design an application that fully meets consumer preferences. 

 

To learn more about MVPs, watch the two videos on our “Your IT Breakfast” YouTube channel.

  1. What is an MVP and why do you need it?
  2. How to check if your product actually matches the MVP definition.

 

Closing thoughts 

The price of creating a mobile app depends on many factors, from the functionality complexity to the type of a software development company.

Enabling businesses to cut costs while retaining high quality, IT outsourcing has continued to become quite popular. With a large talent pool, Poland is quickly becoming a well-recognized resource for addressing technical challenges. 

 

Our team can assist you with the following: 

  • Analysis of business needs
  • Writing a software requirements document
  • Time/budget estimation
  • Preparing a project roadmap
  • Implementing a system architecture
  • UI/UX design
  • App development, testing, and deployment

Our support can be helpful in every stage listed above.

Let’s arrange an introduction meeting for discussing your App.

Daniel CEO
Daniel
CEO
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