Post updated March 25, 2015.
How much does it cost to develop an app?
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In the past four years, the app market has exploded. Mobile app usage grew by 76% in 2014, and the average US consumers downloads on average 8.8 iOS and Android apps a month. With the introduction to Apple Pay, Apple now has access to 90% of US credit cards. INSANE! The app craze has spread to Android, Blackberry, and every other mobile market under the sun.
And for good reason. Having an app for your business or promotion or whatever it may be can be a game changing marketing tool to drive traffic and revenue. On the highest end of the spectrum, you see Rovio, the makers of Angry Birds worth over a billion dollars off a simple game. Let me repeat that, a BILLION DOLLARS.
Then you also see people who put out basic free apps and still get thousands of downloads for doing nothing. A lot of conversations I’ve had in the past years don’t even talk about apps because the client thinks it’s clearly going to be too expensive and they have no idea where to even start.
The good news? It’s not as expensive as you think and it’s really not hard to start.
Let’s talk about what goes into getting an app developed.
There are many different kinds of apps you can develop. This goes beyond the categories that Apple groups the apps into – food, lifestyle, sports, etc, and into the architecture of different types of apps. Speaking in broad strokes, the basic buckets of app types you can create are:
- Basic table functionality – think about this as a hierarchy: opening screen has big topics and you click one and you now have a set of new lists to click on. The email in the iPhone is a good example of this. Definitely the easiest to build and design and a good option for businesses who want a “simple” app that displays basic information. It’s very possible to make table based apps work with a good iphone app designer.
- Database driven custom functionality – Yes, I know that this is not a very specific bucket, but it is the best way I can describe creatively parsing out content. Imagine you have a whole load of content that you want to utilize. An example would be having hundreds of dog breeds that you want to organize and display differently. This can be done beyond the basic table format to make the app really work. Development on this gets more complex and starts to get into whether or not you want the data housed “native” (built into the app) or “dynamic” (built into an online web services). We’ll talk about that later.
- Games – These have the largest range of complexity, starting with something as simple as a PONG type functionality (imagine Atari) all the way up to a 3D physics engine that does high speed air racing. Scoring points, incorporating the user experience through the physical movement of the device, and hooking into Game Center are all possible. Want to learn more about games? Checkout our Games Tips & Strategies article
- Enhancement or Modification of the device firmware or hardware – This means that you take certain functions of the phone, such as the alarm, camera, or flash, and make it better. One of my favorite examples of this is the Camera+ app that adds filters to any pictures you take on your phone, plus stores the photos on a lightbox.
- Fully dynamic apps – Similar to the database driven apps, these apps are the kind that rely purely on external information – Twitter, Weather Channel, Flipboard.
- Custom utilities – These are apps that are geared towards allowing the user to input content in a specific way. Examples are Pages, Adobe Ideas, and Numbers.
- Everything else – I’m sure there are some apps out there that are completely unique, but I would say the list above covers 95% of what’s in the store today.
The type of app you want to develop may change based on how much content you have and how much control you want to have over the entire process. It’s important to realize that you can get apps done very quickly and cheaply if you know what type of app you want to develop – going into the process without being open to another option could cost you big time.
The app development process can be broken out into four major parts – idea, layout and planning, design, and going live.
1. The Idea
This is the first genesis of where the app will be going and one step after “I want an app.” Looking the app store, there are dozens of different directions you can go – simple information, a game, interactive, etc. You can imagine that the more complicated it is, the more it’s going to cost – but also a higher chance at getting a return on investment. Games are complicated, but can go viral easily. Simple apps don’t do much, but they are cheap and easy to build. The first step of the process if to find your sweet spot of budget and marketing effort.
2. Functionality Layout
It’s not enough to paint the broad strokes for a programmer, because they’re not going to deliver what you want. You need to either invest a lot of your own time to go through the details or find someone who can translate Programmer to Civilian and vice versa. This will pay off big time in the end. This step involves going through every single screen and understanding how all parts of the app interact with each other – If I press this button, what happens? You will be amazed how many steps and scenarios there are for even the simplest app. The amount of functionality that needs to be defined and built will also play a part in the cost of your app.
Unlike websites where you can often get someone who can design and code at once, apps usually require a team of people to complete. The nice thing about this is that the designer can be graphics, print, web, or whatever – the deliverables to the programmer will be images that he just pops into the appropriate areas. The design comes in typically once the programming and functionality have been defined – the designer gets a full list of what needs to be created. Design can make or break an app, plain and simple, so don’t skimp on this. You need a great icon, splash screens, tab icons, and dozens of other assets that need to be tied together.
4. Going Live
Once you have the app built in xCode (the program that apps are built in for Apple), your developer can help you get the app in the store (iTunes for this example). This requires setting up an iTunes Connect account ($99/year) and then filling out all the information necessary for the app – icons, descriptions, pricing, etc. Most of this is pretty intuitive one you get the files loaded, and a lot of it can be done by your technical team. The setup is also a one time thing, so if you decide to develop another app later on, you already have an account you can dump it into.
Once you have the app up in the store, you can monitor all the analytics on the back side of it through iTunes Connect – how many downloads, how much $$ you are making, etc. There are lots of different ways to drive revenue with apps, including advertisements inside the app and being able to purchase additional information through the app (in-app purchases). You can see everything happening. You can also have someone monitor this account the way you would have someone monitor your PPC or SEO campaigns so that you are always maximizing your traffic and revenue.
If you’re interested in learning more about the process of developing iPhone apps, including drafting the idea, development, design, launch, and marketing, checkout Bluecloud’s free Mobile App Development Guide.
Development for iPhone apps deals with the programming side of the process. With most projects, an app development firm is going to roll up the design into the entire project since it’s a bear to try and piecemeal images into an app unless you build the entire thing dynamic and through XML via online databases. One thing to note is that these costs can vary depending on what devices you are developing for. Make sure you ask your developer what you are developing for – basic iPhone, iPhone 4, iPhone5, iPhone 6, iPad or all of the above. I’ll see what I can do break out typical development costs for different example projects.
- Simple, table based app – $1,000-4,000 – you provide all the content, clear direction, and example apps of what you want it to do. If you know your way around Photoshop, you can probably supply the graphics which will cap this project at $1,500. The additional costs are when you want to GPS locators, Social media integration or bells and whistles like that.
- Database App (native) – $8,000-$50,000 – Again, you provide every piece of content, image, writing, sound, etc. The cost is going to come from creating the logic within the app and architecting all the usability and/or game play. The content will usually be dropped in and then parsed accordingly. These projects tend to be front heavy since the data is what’s driving the entire game and the framework is so important.
- Games – $10,000-$250,000 – The hardest to ballpark. As a benchmark – I’ve heard Angry Birds cost anywhere from $125K-$180K to develop (although they were pioneers). Talking to some developers who are into the hardcore game source code (render, sound, maths, physics, etc), many of the racing games will that use the gyroscope will be $125,000 without even blinking – and that’s just for the code. Even if you try to keep it hyper simple, games get complicated quickly. Hooking into game center, having top scores, and integrating with an online community can be tricky. The benefit of a game is that they download in much greater number. As a marketer, there is nothing more viral than a fun game, which is something to keep in mind for your ROI. Ask yourself: how much do I need to spend to make a “fun” game? That’s only something you can answer. Interested in learning how to develop elite apps? Checkout the post How To Develop an App Like Angry Birds.
- Additional Includes – See below – here’s a quick list of additional functions you may want to add into your current app:
- In-App Purchasing – $1,000-$3,000 – this allows for users to buy new content or full versions of the apps. The cost spread comes from the amount of in-app purchasing, the complexity, and whether or not you build it all into the first app or if you are doing it from a server.
- Web Services – $1,000-$5,000 – This is taking the content to a remote access point so that you can update your app with an XML files instead of raw code changes. The degree to what you need varies but I would recommend having this conversation with your developer before getting too deep – it can save you HUGE headaches down the road.
- Game Center – $1,000 – Apple’s done a good job at making this integration easy with the SDK. As long as you keep the numbers clean, you should be able to integrate easily.
- Share Capabilities – $500-$1,500 – This is mostly for social media (twitter, facebook) and emailing, but there can be other integrations. WordPress websites, for example, may be one. Lots of options and most of these platforms have robust APIs to make it work well.
- SDKs and like Chartboost – $50-$200 – SDKs are an extremely important part of tracking our apps and making money off them. Generally you can get any SDK integrated for relatively cheap, but the more specific you are with your SDKs, the more expensive. SDKs that you may want to include are: Google Analytics, Chartboost, Applovin, Xplode, AdMob, and Tapjoy.
The design of your app is going to make a huge difference in your overall ROI and user experience. The design will help convert viewers to downloads from the screenshots you decide to upload and will help people using your app feel more engaged. Investing in a good design is easily the best way to increase your margins on a 2 year timeline. You can use a web designer, but often your best bet is going to be finding a mobile app designer who understands user flow and the space restrictions.
App designs usually come in packages, much the same way development does – you will buy a “suite” of .png and PSD files that fulfill all your needs. This includes all necessary screens and icons. You will be surprised at how many different pieces there are, the icon alone needs about 4 different sizings for a universal app (iPhone and iPad). Here’s a rough breakdown of costs:
- iPhone only (usually the base line is not done for the retina display, as seen in the iPhone 4 as they require higher resolution files) – $500-10,000 – This will get you a base level design that you can send over to the developer who will be able to add these images into the code. HELPFUL TIP: ask the developer what they want the files named and do that for them before sending. It will save you both lots of time and headaches.
- iPhone 6 Plus Compatible – Add 25% to above cost – these images will be sized at 2208 x 1242px height (more than twice that of the 640×1136 iPhone 5)
- iPad – Add 50% to above cost – this is assuming that the layout is very similar and user flow is also similar. In many cases you will have to create alternate functionality to accommodate for the iPad size and speed, which requires new designs. HELPFUL TIP: Most iPads contain retina images. These images can be large, be cautious of your codes file size when implementing.
The icons should be included in this entire package and you can probably ask for screen shots if you want to have some that are better than doing a simple screen grab of your phone. I’ll say it again – don’t skimp on design….you’ll have a MUCH harder time making your money back. The full story of developers and designers can be found in my free ebook.
There really aren’t any hidden fees except the the $99 Apple will charge you per year and the 30% cut they take for each sale you make. Everything else will be in development, design, and IT architecture (hosting, servers, etc). The total cost of an app can vary based on all the different variables from above.
You can definitely find all-inclusive firms that will do everything for you for $1,000 or so, just be wary of the quality and how much control you will have over the process. Just like anything in web marketing, low costs means they have to make it up in volume and the client feels that the hardest. Think less about the cost and more about what strategy will have the biggest ROI before pulling out your checkbook.
Even if you let the app sit in the store for a year, putting some light marketing and analytics attention on it can easily help pay for your investment. I’ve seen apps that cost $3,000 drive about 2K new users to a website a month, with an average time on site that is 400% higher than web visitors. You can get very creative in how you market these visits.
Please note that the above numbers are highly variable and can range lower or higher depending on lots of factors. As the market increases in competition, you’ll see the cost come down, but just be wary of the 19 year old high schooler who can built you Angry Birds for $1,000. Similarly, there are companies paying $250K for one simple database app to be developed, which is like paying someone half a million dollars for a website. Just corporate bloat – if you’re going spend that some money, you better be getting something incredible.
Learn more about how to develop games and other apps in the post iPhone App Developement – Part II.
I’ve developed a few apps for fun and I would recommend anyone thinking about it to have a discussion about it, no obligation at all. The web’s next big market is going to be mobile – both phone and tablet. You’re either in or out. If you want more info, download the ebook. All I ask is that you Like this page on Facebook, Retweet this article, or link to me from your site. Please note that I get about 10-15 emails a day from people asking for advice on apps, so if I don’t get to you immediately, don’t take it personally
Make sure you sign up for my newsletter on the right hand column of the website and download the ebook. It walks you through the entire process of creating and making money with iPhone apps and often answers 90% of the questions people have.
There Is Another Way
When I first started I had two goals – learn about this cool new mobile market and make money in the process. The problem was that I didn’t have a huge amount of money to spend AND I couldn’t afford to take a risk like that.
So I figured out that if you buy app source code at a fraction of the cost, you get 80% of the work done for you for about 10% of the cost of developing it yourself. It changed everything.
This process of “flipping” source code allowed me to make hundreds of thousands of dollars in a matter of months. It’s a new way to think about the app business and how to make money. If you’re interested in getting into apps in order to make money, I urge you to read about how I did it and sign up for the source code list.
If you want to read more – subscribe to the newsletter and download the ebook. I wrote it for people who enjoy this type of article. Easily the best place to start if you want to learn more about apps.