How much does an app cost?

The question of how much an app costs comes in easily two or three times per day. Different forms, different ways, and more than often the same answer – it’s not free!

While we have all heard a few success stories of an app being developed for next to nothing and which started generating serious dollars within weeks, I’m afraid this is usually not the norm. We don’t tend to hear about the other 98% who have failed and maybe even lost serious dollars with weeks! So what does it take? How much does it cost?

Here I try to explain the steps required in order to take an idea to market. And hopefully retire on it! Most product launch require the same steps so this should be pretty straight forward.

The premise

In other words, the small print

Three key ingredients are required to launch a digital product. You need

  1. the idea: you only need one and you’re good to go
  2. the build: or in other words writing code. Wouldn’t it be great if anyone could do that, like anyone could build a bridge, or a plane?
  3. the marketing-design-communications: there’s a strategy behind this, and while it’s easily dropped, there’s also million of other apps out there!

So if you are a developer, or own a monkey able to write good code, you’ll find this post doesn’t quite apply to you. On the contrary, if you cannot write code and yet have had an epiphany recently giving birth to the best idea ever (which is now safely locked in your head), then let me walk you through this.

The steps to launching an app

To be followed with a hint of common sense

Of the following steps, not all are an absolute requirement – other than the technical build. All can be dropped, but not without with a certain risk coming with it. Nobody wants a bad idea (useless app), a buggy app, or a poor user experience.

1. From idea to product

A few discussions are likely to be required with your most trusted advisers to establish the actual viability of a project and further define the concept and indirectly, estimate costs. Part of this exercise is also the research aspect; has someone already done something similar? Is the idea completely fresh? should you know your competitors better before jumping in?
At EmpireOne this is where we will take your idea, turn it around and look for the problem it solves instead. This helps shifting the focus from the idea to the solution for a real-life problem.

2. Product definition

This is where the actual functionality of the product are discussed. This establishes the direction for the development work in order to deliver the product which solves a problem, and indirectly fulfills your idea. Some will try and build a full-featured, better app to take on a competitor, others will stick to the absolute minimum. Different school of thoughts, which I will come back to later on.

3. Layout (wireframe) design

In order to understand how the various functionalities fit together and how they will be organised and presented back to a user, wireframes or mockups are build. Often this is a natural progression of the previous step, and both will merge together. This is also the very first step where everyone involve can visualise what the application will look like, even though it may be quite rough at this stage.

4. Design concepts

This is where the marketing and communications gurus come in in order to establish the branding and personality to give to your product. Unless your name is Woolworths or Coles, few (but some) can release products with a black-and-white label. Additionally, smart devices are constantly being more and more engaging, so this step will sometimes be even more important, depending primarily on your idea.

5. Product build

Then clever developers will get together to piece things together for you. Today, few projects don’t leverage open source software. Sadly open source doesn’t mean free, but definitely more efficient, hence cheaper. Also the project management will differ. We, for instance, tend towards more agile, lean development practices. But not every project is suited for this. Lucky you, we’ll tell you!

6. Launch & marketing

This used to be very focused just before and post-launch, however with social media now widely established, a clear focus on initial “early-development” marketing commonly takes place. Regardless of what activities (if any), the purpose here is to get the the app known, spoken about and ultimately downloaded and used.

App development project - Indicative planning

The previous table illustrates the various steps and how they interact with each others. Throughout the project, one, two or sometimes three will have a greater focus at a given time. There are also no dates, as each can be quite variable.

Each step is listed with a time indicative color core – the darker the blue, the more this is a focus at the time.

The section in green is an interation, and this concept is explained in Agile, iterative, lean-development. In short it’s all about taking 16 weeks of work and making 8x 2weeks..

Translation into dollars please

Undeniably the most recognised unit of measurement

True, no dollar figure so far. Primarily because it can vary greatly. Apps can cost anywhere from 10K to over 150K. It was revealed a few years back that the first version of AngryBirds cost €100,000 to build – Ouch! It has also generated €50 million in brand value over year one – wow! Unfortunately we don’t hear much from the less successful stories. As a rule of thumb, the following figures should give you a starting point;

Features built into your app

The more features are required, the more expensive the development is likely to become. Keeping in mind that junior to senior mobile developers charge on average $65-150/hr (AUD, but USD/CAD/EUR are all close enough). The following list shows various types of apps, generic functionality or “reference points” to estimate the cost. These are technical implementation costs, not design, not marketing.

  • Simple, business-like apps: 5,000-15,000, features using the standard phone abilities, think of and alarm clock, todo list, voice recording, contacts searching, etc
  • Database (local or API): storing data locally (think of “login only once and be forever remembered”, or saving user preferances) will fetch 3,000-10,000; designing and connecting to a REST or XML services will push the cost up by a further 5,000-35,000
  • Advanced data capture: if you have decided to track a user continuously, reading and capturing GPS, speed, velocity, or else, this is another 5,000-20,000
  • Social integrations: login or posting to most social media will add about 1k per integration
  • Complex calculations: 3,000-6,000; think of apps trying to calculate object trajectory, velocity, etc
  • Complex gestures: 4,000-8,000; rotating, moving, two-fingers vs single-finger, etc.
  • Advanced media, sounds or image: 5,000-10,000 if using any sound playback, image manipulations, video integration, or else
  • Games: 20,000-150,000 games are a whole different ball game as they usually require very custom use interactions, sound, device integration (vibration) and are also using different frameworks

Target platforms

Unfortunately, iOS & Apple, Android & Google, Windows 8 & Microsoft, and others, all speak a different language. This means that in order for your app to run on different platforms and different version, there will be added complexity, added effort, added cost.

  • Android, iOS, Windows8, etc: if you want your app to run on many platforms, add 10% per platform
  • Phones vs tablets: because of the difference in screen size, designing an app for a phone is vastly different from one for a tablet. Add 15% additional cost per device
  • Version compatibility: You you want to support iPhone4, 4S and 5, or Gingerbread, IceCreamSandwich and also JellyBean operating systems? Factor in around 5% extra cost per version

Common practices for technical projects (and again this very much depends on the nature of the project) is to allocate 1/3 to 1/2 of the budget to the build, and the marketing and design share the remaining. Marketing is the most easily dropped component, since social word of mouth, online, is now proven to be extremely powerful.

However too many think that developers are designers and also drop the communication/design side of things. This is unfortunately not the case as people writing code usually have little concerns to how things look.

How to drop the price

Everybody likes a bargain!

First thing to keep in mind is that, not every idea needs an app behind it. Make sure you read our upcoming post on ‘Understanding apps: mobile, native or responsive’ as their cost can vary significantly.

Second, a number of organisations or individual developers will also accept a remuneration based on equity or revenue sharing, with or without a cash component. This is a legitimate business venture so just be careful on (1) the commercial agreement and (2) knowing who you are dealing with.

Finally, the other option is for you to learn programming and smartphone development and granted you can survive on instant coffee and 2minutes noodles for a while and can provide your own computer, then’ll you’re in for months of value at a low cost!

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Written by

Managing Director of EmpireOne Group in Sydney, Sebastien has made a life of understanding both sides of the fence. Born in Canada and educated as a self-started business software engineer, not a single day passes without finding Seb tweaking a process, system or piece of code.

2 Comments to “How much does an app cost?”

  1. Alex says:

    Thanks. This is very comprehensive and highlights a few very good misconceptions on the topic of building apps. I get asked all the time also. Technologies are widely used, but not widely understood I guess.

    Btw – the agile development link is dead.

    Alex.

    • Sebastien says:

      Hi Alex, thanks for your contribution. Bad links are a result of future articles being drafted but not published ;0)

      Now that you’re in on my little secret, do stay tuned! -Seb