How Much Does it Cost to Develop an App: 2023 Estimate

One of the most critical and urgent questions of mobile development that is usually asked at the very beginning of the process is, “How much does it cost to make an app?” Since almost everything in this world has a price, there is no wonder this question arises. If you want to start a new application, you need to know what budget to allocate so your solution will meet the standards and be welcomed by the audience. And the answer to this question is short yet complex: It depends.

Here are some average numbers so you can approximately predict how much money you will need for app creation:

• A minimum viable product—from $5,000 to $20,000

• A simplified app—from $20,000 to $60,000

• An average-scale app—from $60,000 to $150,000

• A complex full-scale mobile app—from $150,000 and above

However, these numbers are still vague and don’t tell much about the exact sum of money you need to allocate to ensure high-quality, fast, and safe app creation. Besides the average cost of an app, your budget should consider many other factors like the team’s location, your features list, and expected deadlines. Sounds overwhelming, right?

If you are at the stage of assessing the possible spending or want to check if you counted everything right, this article is for you. We will talk about the basics of app development cost composition, the budget planning strategy, and tips on saving money.

How much does it cost to make an app?

Let’s start with the general knowledge. We have already mentioned the possible sum that you can spend on building an app depending on its scale. However, it may not suit you since the app’s size is only a small part of what really influences the app development cost. Other factors include:

• design complexity

• number of screens

• quality assurance phase

• number of features and their complexity

• database implementation

• AI/ML implementation

• all third-party integrations

• applying security protocols (HIPAA, GDPR)

• size of the development team and its seniority level

• team’s location and hourly rate

It seems like quite a list here and it’s not even complete. To understand more about how the budget is planned in these cases, let’s learn some valuable stats about app development cost. 

Average cost of an app: statistics

The volume of mobile development is steadily growing. According to Statista, there are more than seven million apps in the two most popular stores, Google Play and App Store, and every month, there are around 160,000 apps released on these platforms.

The mobile app cost is also evolving. The exact amount will change depending on your business niche, target audience, and the number of competitors you will have to face. Here are more interesting stats regarding mobile app development and its cost:

• There are more free and freemium apps on the market than there are fully-paid ones. For example, almost 94% of all the apps available in the App Store are free. For Google Play, it’s a 97% share. (Statista)

Source: Statista

• By next year, the total market value of mobile apps will reach $613 billion. (Statista)

• In 2020, people in the U.S. spent an average time of four hours and 16 minutes every day on their mobile phones. (eMarketer)

• An average mobile user has around 40 apps installed on their device (Simform) and uses nine of them on a daily basis. (TechCrunch)

Source: Statista

• 50% of time spent on mobile is dedicated to communication and social media apps. (Statista)

• The most expansive development stage is UI/UX design, not the coding itself. (BusinessofApps)

• Hiring a US developer can cost you around $105,000 a year. (BusinessofApps)

Now, let’s move on to the more specific app development cost stats that are defined by the team’s location and the type of app you want to create and launch.

Location of the app development

The team’s location is one of the most prominent factors that influence the total costs of mobile development. Depending on the region, the average hourly rate will be different. Here is what they look like:

The exact rate will depend on:

• the specialist’s position (QA engineer, frontend engineer, backend engineer, designer)

• seniority level (junior, middle, senior)

• tech stack (programming languages, testing tools, third-party integrations)

Cost of app development by type

Another classification to recognize is apps’ types. Each business area has its own level of competition and number of applications released daily, so the average cost to make an app will vary from niche to niche.

These estimates are an average and are based on our experience as a software development agency. A more accurate mobile app development budget for your project can be calculated when you and your team consider more factors that we are going to talk about now.

Factors that affect application cost

The cost to develop an app is determined by more than just the team’s location and app type. Here is the app development cost breakdown including a list of the most influential factors that will significantly impact your final budget.

Third-party agency vs. in-house app development

You can either hire all the necessary tech specialists as full-time members of your staff or hire an outside company that will complete the app development for you. Both approaches have their pros and cons. For example, a complete in-house team will be easier to communicate with and control. However, the app development costs in this case will increase drastically.

Working with a third-party agency will be cheaper compared to hiring an in-house mobile department. For example, if you wonder how to build a podcast app, an agency, will develop a whole application for $90,000 in four or five months. Or you can pay this sum a year to one iOS engineer. Besides, outside teams will more likely provide you with a high-quality process since they care about their reputation. But you can face communication issues like being in different time zones or having a necessary specialist be offline. You need to manage the possible risks of all the options and choose the one that fits your goal best.

Complexity level of app development

Well, the gist is simple: The more features you want to see implemented and the more complex they are, the more time and money you will have to spend on mobile development. It’s actually something that is discussed and planned with your team before the design and development stages even start. Here is a simplified classification of apps depending on their complexity level:

For a more detailed description of the level of complexity required for your app, here are the shortlists of features you’ll want to consider including in your product:

A simple app/a minimum viable product:

• Sign in/Sign up

• User profile (with editing features)

• Simple search capabilities

• Push notifications

• Text chat

• Admin panel

A mid-level app could include:

• All the simple app features

• Social media integrations

• Payment gateway

• Geo-location and location tracking

• More advanced security options

• Simple chatbots

• Data storage

A complex mobile app:

• All the mid-level app features

• Custom integrations

• Cross-device synchronization

• Live streaming

• Voice/video calling

• Sophisticated dashboards

• Rating system

Complex apps can also include work on the legacy code and significant redesigns.

Please note that these lists include only features that can be applied to almost any type of mobile app, but they can include industry-specific features as well.

These characteristics will also influence the development time. A simple app can take up to three months to be finished, an average-scale app—from four to ten months, and for a complex app, the timeline can be from ten months to several years.

Visual design complexity

We already mentioned design as one of the key factors that influence the app development cost. The thing here is the same as in the previous block: The more features and screens you add, the more money you will have to spend. Here are some parts of the designing process that you need to consider.

• User experience

User experience design (or UX design) is responsible for creating a way people will navigate inside your app. The main goal of UX is to help users perform the action they want to with the minimum amount of time and effort. At this stage, the app cost will be tied to the level of engagement and complexity of the design. For example, button placement, size of elements, user flow, and template usage will impact the UX and thus your development costs.

• User interface

If UX is here to make the app understandable, the user interface (UI) is here to make it pleasing to the eye. All the visual elements count here:

• Layout

• Icons

• Color palette

• Fonts

• Button shapes

• Animations

• And many more

If your app is eye-catching, your users will get a more positive experience using it and will stay in it for a longer time. Besides, a correctly picked color theme and a noticeable logo will help you create a strong brand identity. Remember something like Apple, Nike, or McDonald’s. When you see these names, logos and colors just pop up in your head, right? 

​​App hosting and security

The question of cybersecurity is as urgent today as ever before. More and more cyberattacks happen every day. Positive Technologies claims that around 80% of mobile vulnerabilities can be accessed and used by hackers. They can target both small businesses and large corporations, so businesses of all sizes should pay attention to how they protect their users’ data. Your security costs will depend on what data you collect, where you store it, and how you use it. The most common examples of security measures are end-to-end message encryption and an SSL certificate.

The platform on which the app will run

This factor implies one of a few core dilemmas in mobile development: ”Should I develop a cross-platform or a native app?” A cross-platform means that the app will run on both iOS and Android while having a common codebase. A native app will have a separate codebase for each platform, so technically, you will need to build two apps.

The choice here will be based mostly on your initial target audience. You will need to take a look at both markets and decide whether you should start with one platform that is used the most by your potential users or try both at the same time.

A native app will provide your users with an overall better user experience and will have fewer bugs since it’s developed according to the platform’s specific requirements. Besides, it can use the functionality that is unavailable for cross-platform apps. However, the app development cost will be higher because of the extended team.

If you opt for a cross-platform app, you will spend less money and will get to market quicker. But there is a higher chance of UI/UX issues and bugs.

Location and structure of a development team

Despite the way of development you choose, you will need a team that will complete the development and maintain the app in the future. The minimum team composition needed for MVP development will consist of:

• Project manager

• Full-stack engineer

• QA engineer

• UI/UX designer

If we add more features to the app, we will need more team members. For a middle-sized mobile application built from scratch will also be:

• Business analyst

• App architect

• Backend engineer

• One or two frontend engineers

• QA engineer

• UI/UX designer

• Project manager

The more complex your app gets, the bigger your team grows and the more money you should plan for your development budget.

Backend infrastructure

Backend is what is happening “under the hood” of a mobile application. Users don’t see these processes and don’t have any access to them. The most common backend tasks are:

• File processing

• Running scripts

• Storing and updating databases

• Data encryption/decryption

• Processing user input data from frontend

If you want to build an application that will have millions of users, collect their data, incorporate AI and ML, support IoT, and provide live streaming, a backend is a must-have for your app.

How to build your mobile app development budget

Now that you know what factors influence the cost of the app development process, we can move to the budget planning strategy. You may not come out with the exact figure on your own especially if you are not tech-savvy and are dealing with the mobile app development process for the first time. But, you will have more realistic expectations of how much money you will eventually spend.

#1: Break the process down into smaller parts

The first thing you and your software development partner need to do is to break the whole development process down into separate tasks that are easy to manage. Then, your partner provides you with the required team composition and assigns them respectively. This process will also include time estimates of each task and defining the hourly rate of each specialist.

You should also estimate your available resources. If you already have an in-house team, make sure that it has enough qualified specialists to do the job and hire additional staff if necessary. If there are no full-time software engineers, try working with freelancers or third-party agencies.

#2: Choose the pricing model

Let’s move on with the situation when you start working with an agency. In this case, they can offer you one or several ways of charging. The most popular options are fixed price and time and material basis. A fixed price means that you will pay a fixed sum of money for the whole project. This pricing model is suitable for small-scale projects where the list of tasks is totally clear. The time and material model is closer to a “pay-as-you-go” method: You get a project estimate and pay for the work according to what the team has completed. The overall app cost is less stable here, but the flexibility of the agreement compensates for it.

#3: Make an estimation

At this stage, you actually count how much money it will take to create a mobile app. It can be done in the following ways:

• Ballpark—A very rough estimate that is based on previous experience, current trends, theories, and speculations.

• Parameter-based—Besides historical data, it includes actual calculations. Usually, you multiply the number of hours needed for a task by the hourly rate of a responsible specialist and then sum it all up.

• Three-point—All above-mentioned factors + possible risks.

#4: Take risks into account

Speaking about risks, it’s impossible to predict anything with 100% accuracy. Too many unexpected external factors can influence the final result. That’s why your development team should inform you about possible issues you can face and how to avoid them. Also, don’t forget to add a “risk buffer” to your budget in case something goes wrong.

#5: Track your spending

Once the development process starts, make sure that at any stage you stay within the limit of your available resources. To do that, you can acquire a software tool that will save all invoices and payments data in one place or delegate this task to an accountant. Another option is your project manager who will keep track of the payment process.

App development price checklist

Even though the final costs for app development will differ from project to project, there are still several core elements that will be present in almost any project. If you want to calculate the approximate budget for your mobile app, here is a short, comprehensive checklist of what you have to take into account.

Depending on your business niche, you may also want to include more industry-specific factors in this checklist like additional security for Fintech or expert feedback for healthcare, but most projects will have this basic structure for assessing the mobile app development costs.

Ways to reduce app development costs

You can see from the numbers we mentioned above that a custom app development cost can be quite huge. To make it less of a burden for you, here are some tips on how to lower your spending.

✔️Do the research and set the goals

Don’t underestimate the power of thorough and detailed research. The more you know about your target audience, competitors, technologies, and overall market conditions, the less your chances are to make core mistakes that will result in more costs later.

Also, the research will help you define your vision and goals more accurately. As a result, it will be easier for the team to understand what needs to be done and for you to prioritize features and set the correct KPIs. 

✔️Choose the right development team

When selecting a vendor to help you build your app, pay attention to their expertise, experience, and reviews from previous clients. Visit their website and study their portfolio to see if they are right for you. Good app developers will objectively estimate your project and do their best not to exceed the budget.

✔️Provide detailed requirements for the project

Detailed requirements description is a must in the app development process. It will speed up the whole process and decrease the total cost to build an app. The minimum set of specifications will include:

• A short app description

• Market context

• Buyer persona

• User stories

• A set of desired features

• Technical spec

The best way to present these to your team is by creating official documentation. It will help you minimize the costs that can result from miscommunication.

✔️Create an MVP

A minimum viable product (MVP) is the first version of the product that has only core features included. It’s created for validating the idea and testing the market. An MVP development costs way less than a full-scale cycle and allows you to understand if your app will be recognized by users. You will also be able to collect valuable insights that will define what to do with your mobile app development project.

✔️Use automated tools when testing your app

Testing automation implies no manual intervention. Well, almost – QA engineers still need to write the scripts that will scan the code with the help of an automation tool. From a business perspective, automated tests are advantageous because they are faster, cost-efficient, and give you instant feedback.

✔️Minimize the app functionality

Even if you are planning to develop an enterprise-level solution, you won’t be able to implement it all at once. Moreover, some features can turn out to be absolutely redundant and not solve any users’ problems. To reduce the development cost, try to choose the most relevant functionality for the first release and then gradually improve the app according to the feedback.

App development cost of famous apps

Now, let’s take a closer look at how much money could possibly be spent on the development process by the creators of the most popular mobile applications: 

• Tinder

Tinder is the most popular dating app in the world. Its most prominent features include:

• sign in/sign up

• GPS location

• user profile

• matching

• push notifications

• chats 

If we assume that they had a standard team composition, the development of Tinder would total around $40,000.

• Uber

Uber is a world-famous service for car and driver booking. Technically, it has three apps: two mobile (for passengers and for drivers) and a web admin panel, so the final cost should be multiplied by three. The most prominent features are:

• payment integration

• GPS location

• routing

• push notifications integration

One Uber-like mobile app will cost around $50,000, so creating a whole new service like that can take $150,000 and more.

• TikTok

TikTok is a video platform for sharing short videos. Its popularity skyrocketed during the pandemic and more people still join it every day. If you want to build an app like that, you will need to implement:

• user profile

• video uploading

• customer support

• chat

• comments 

• push notifications

• camera and storage access

On average, the cost of a TikTok clone will total around $80,000 without the maintenance costs.

Conclusion

We hope that this article has answered most of (if not all) your questions regarding app development cost. The main conclusion that can be derived is that the final budget always depends. It depends on your business area, project’s scale, team composition, and many other parts you need to pay attention to.

And don’t underestimate the power of unexpected circumstances. However, if you follow the advice we provided today, you have all the chances to minimize the mobile app development cost for your project.

Here at Yellow, we can help you with that. We have already created and successfully launched more than 50 mobile projects that are used by hundreds of thousands of users. If you are looking for an agency that will take care of your app’s estimation, design, and development, feel free to drop us a line on our email or via a contact form. We can also provide you with MVP development services and expert consultations.