Mobile App Development Costs

How Much Does it Cost to Develop an App?

Almost all app development Vancouver agencies hear this question frequently, after all the cost has a big impact on the decision of businesses who want to build an app. Developing apps is costly and this is a very hard question to answer especially considering that the range of functionalities that can be in an app.

Kinvey report shows that “56 percent of mobile leaders surveyed say it takes from 7 months to more than one year to build one app. 18 percent say they spend from $500,000 to over $1,000,000 per app, with an average of $270,000 per app.” Clutch’s agency survey is not showing the range to be any smaller. The median high cost is $171,450 with a wide range from under $30K to over $700K.

In this post we are going to talk about why is the range so wide, what are the factors contributing to high cost of app development. Then we discuss the different approaches you can use to develop your app and the pros and cons of each approach. We also introduce you to the Roadmap Workshop as a way for you to accurately estimate costs of developing an app.

How Much Does it Cost to Develop an App
Why Are App Development Costs So High?

Apps are different in many aspects. Some are more complicated than others, some have better designs, more user interactions, etc. All of these factors impact the scope and the cost associated with an app.

Mobile Apps vs Web Apps

Depending on the problem you are trying to solve you might need a mobile app or a web app or both. Most of the time the solution is not a standalone mobile app and that adds to the overall scope and cost. We have experienced this with many of our clients who think they need a mobile app, just to realized (usually after taking our roadmap workshop) that they actually need a web app instead or both a web app and a mobile app. To learn more about the difference between mobile apps, web apps and websites, see our article: Website vs Web Apps

iOS or Android, Which to Choose?

Similar to web apps and mobile apps, the different platforms you want your app to be on can impact your overall scope and cost. Some agencies like A.Y. Technologies build mobile apps on cross-platform frameworks like React Native and that means building an app on android and iOS will have no extra cost. If your developer is not using similar technologies you need to consider the platforms you’re building your app on and the costs associated with that.

User Experience Design

UX Design is an important part of any app development process. For an app to be successful it needs to focus on user experience design. From paper mockups to low-fidelity and high fidelity prototypes all the way to having clickable prototypes you need to make sure you are providing the best user experience to your app users. Unfortunately it’s time consuming and costly. The more time you put on UX the more expensive it gets but at the same time the higher the chances of success.

Template Apps vs Custom Apps

It comes as no surprise that a template app is cheaper and faster than building your own custom app. Depending on your industry this may be possible. If you are a visionary on the other hand, that won’t work for you. You will likely need an app that’s built for the exact problem you see in the market. Especially if you are thinking of building an app as a business or if it’s a big part of your startup, a template app is not the right solution for you. Template apps are cheaper while custom apps are much more expensive. That has an impact on the wide range of costs associated with app development.

How to build a mobile app
How to Build an App

Building an app is costly and it’s a big investment for any company or individual. So what are the different approaches to building an app? What are the resources you can use and what are the pros and cons of each of those approaches? We will start with building apps in-house, then talk about using freelancers (local and offshore) and then move on to using offshore firms and finally talk about using reputable agencies.

inhouse app development

In-house development

One of your options is to build an app in-house. You need to hire necessary experts including engineers/developers, designers and QA experts. You need to have the necessary infrastructure and tools to help them achieve the goal.

If you only consider the cost of building an app, this option might be cheaper than hiring a reputable agency. In reality though, you need to add the time/money you spend on attracting the talents, going through the hiring process, benefits and other costs related to have employees.

Pros

Cheaper than reputable agencies – considering only costs of building an app.
Good for long term development and apps needs features for 5 to 10 years.

Cons

Employment benefits + tax costs
Hiring takes time and this can cause delays
Finding talents is not easy
You need to be heavily involved in all aspects of the project, including managing it

freelance app development

Local freelancers

Using local freelancers is another option and means that you can outsource the work to experts. This will remove the headache and costs involved with hiring employees. Their hourly rate might be 20-30% more than hiring employees, but the cost and time saved on benefits and hiring process will make up for that easily. Overall this solution is still cheaper than hiring a reputable agency.

The issue with this approach lies in the scope of your project. Usually a single freelancer cannot take on a big app development project. They are experts in one area but not in other areas. They might be good with iOS development but not with web development or design. This means that you need to hire more than one freelancer. You and your project might get stuck in the middle especially if the project is not moving ahead as planned.

One other issue with using freelancers is that they might not be the expert in the exact niche and technologies that best fit your project. In this case they either force you to use a technology they are most familiar with or you are paying them to learn the technology best suited to the problem.

Pros

No need to pay for employee benefits to costs associated with hiring
Cheaper than reputable agencies

Cons

You need more than one freelancer for bigger projects
Communications between freelancer could be an issue and cause delays and cost overruns
They might force you the technology they are most familiar with
Finding good freelancers is not easy
You still need to be heavily involved in managing the project

outsourcing app development

Offshore Freelancers

Using offshore freelancers is route we have seen some clients use and for the most part they are left with a bitter tastes in their mouths. Projects are delayed, budgets are exceeded and little to nothing to show for it. This option has one great advantage: cost. Your costs could be considerably lower if you use offshore freelancers. They are the cheapest option out of the 5 we cover here, but if you consider the true cost of building a successful app the results might be different.

In addition to the issues with explained about the local freelancers, you now need to deal with issues such as timezones, communication and translation. These are the biggest reasons we’ve seen projects outsourced to offshore freelancers fail.

Pros

No need to pay for employee benefits to costs associated with hiring
Cheapest option available. (not considering the true cost of building apps)

Cons

Timezone issues can make the feedback loop long and time consuming
Communication between freelancers and you are the biggest hurdle.
Lots of context lost in translation
You need more than one freelancer for bigger projects
They might force you the technology they are most familiar with
Finding good freelancers is not easy
You still need to be heavily involved in managing the project

Offshore Outsourcing

This option is a mix of using an agency and using offshore resources. The offshore firms usually have multiple teams, experts in certain fields which is great for you. You can work with one firm to build your app. Considering the cost of this approach, it’s certainly lower than using a reputable agency. Sometimes they get even cheaper than hiring local freelancers (mind you, for low-end quality).

The issue here is mostly related to timezones, communication and translation. Timezones will restrict your ability to communicate back and forth with their team effectively and delay the project. One other barrier for communication is that most of the offshore agencies  have limited resources that can communicate clearly in English. All those resources are usually deployed on project management and business development roles. This means that your request from English has to be translated to the local language to be passed to designers/developers that are actually doing your work. A lot of details get lost here, and a lot of wasted effort from your side and their’s. Adding all of that to the true cost of building an app, you might consider other options.

Pros

They usually have a team, so you don’t need to look for multiple people to hire
No need to pay for employee benefits or costs associated with hiring
Seemingly cheaper than reputable agencies (not considering the true cost of building apps)

Cons

Timezone issues can make the feedback loop long and time consuming
Communication and the lost context in translation can become time consuming and very costly. (Lost in translation)
They might force you the technology they are most familiar with
Finding a good offshore firm is not easy

reputable agency mobile app development

Reputable Agencies

Using a reputable agency to build an app is the most expensive option. Agencies like A.Y. Technologies have strict guidelines for accepting clients, so you should be ready to get involved in their own evaluation process. That process is the reason they are successful, but it needs your time and you should be available to them. For example, at A.Y. Technologies, our clients have to take our Roadmap Workshop before we officially take them on as clients.

The higher cost is the biggest hurdle in building an app with reputable agencies. In return you get teams of experts that can create a unique solution to your problem. Building on the right foundation will mean better results and lower maintenance costs.

Being established and having their processes in place means that you know what and when things are going to be done. Being local means that communication barriers are minimal and you have access to their team immediately. The feedback loop is short and changes are applied quickly.

Pros

You don’t need to look for multiple people to hire
No need to pay for employee benefits to costs associated with hiring
They have processes in place for you to follow
Clear expectations and timelines for each part of the project
Fast feedback loops mean that your request will be responded to quickly
The least barrier to communication as they are all local and in one location

Cons

They are the most expensive option
You need to be involved to direct the project

estimate app development costs

Accurately Estimate App Development Costs

When a would-be client approaches us for an estimate for their app’s development, we ask them to go through a workshop with us. It’s called a Roadmap Workshop and it’s designed for us to understand the core problem they want to solve with their app. The goal is for us to understand their idea to the point that we can start the estimation process accurately.

In addition to that, we help them visualize their app so they see what they’ll get by the end of the project. With a clickable prototype they can see the workflows that will solve their problem. This means they can also see if their proposed solution is an effective one or not. The ability to do that before even starting the costly process of development is very valuable to reduce the risk of time/cost overrun.

Our clients are heavily involved in the process of this workshop, because their dedication to the process is a key for the success of their project. As a result they get a plan that can be used as a blueprint for their app’s development – with an accurate estimate attached to it – so they can see if building an app with a reputable agency is the way to go for them.

Learn more about our Roadmap Workshop here.

Amin Yazdani

Amin Yazdani

Director of Technology at A.Y. Technologies
Founder of A.Y. Technologies, Amin is formerly Senior Software Architect at Dun & Bradstreet and Solutions Engineer at Indicee. He has a wealth of experience and understanding of the software and applications industry, particularly as it pertains to cloud computing, and web application solutions.
Amin Yazdani

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