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January 9th, 2015

What’s the cost of developing a mobile app?

In our mobile trends report this year we talk about how the general cost of app development ‎is going up, but what is, indicatively, that cost for developing a taxi booking app or a sales tool for employees?

In the past we used to answer this question by asking what the cost of building a house was.‎ Now we’ve got a better answer.

First, let’s define what kind of app development project we are talking about. For the purpose of answering the question we narrow it down to apps that deliver a service to either consumers or employees. Examples of this for consumers are taxi booking, shopping, news reading or music listening and for employees it can be time reporting, expense management, inventory management or a sales tool. Second, let’s make sure that we look at the end-to-end cost of an app development project and not just the software development. Third, we will estimate the cost in effort and time and then translate it into dollars based on the development team you use.

App development phases
Typically the end-to-end process consists of the following 6 phases:

  1. Research and Insights – stakeholder interviews, competitor benchmarking, quant and qual market research and user touch point analysis to understand the use cases
  2. Ideation and Concept Testing phase – defining solutions based on the insights, use cases and problems to be solved and test the concept
  3. Scoping, Design and Prototyping phase – define the solution in detail including use cases, wireframes and mock-ups / visual designs and test the concept with users
  4. Development phase – development of the first phase (MVP) defined scope and designs
  5. Testing and User Acceptance of the service – quality assurance testing, device specific testing on the target devices, security testing if it’s a sensitive solution and performance testing to ensure non-functional requirements are met
  6. Launch and Improve – upload to the appstore, gather customer feedback and insights from analytics and use as input for the roadmap

‎Based on above, here’s what a typical end-to-end project for one platform (e.g. iOS) without backend development will look like in terms of resources and timeline.

Estimated cost of developing a mobile app in 2015

So what is the cost of developing a mobile app?
Now you can calculate the cost based on the resources you are using as this will be based on location (onshore or offshore), country/state, in-house, contractors, small agency or premium mobile developer.

Some average example sample costs are:

  • In-house developer US/UK: 550 dollar / man day (salary, taxes, insurance, etc.)
  • Contractor US/UK: 800 dollar / man day
  • Small agency US/UK: 800 dollar / man day
  • Premium mobile developer: 1000 dollar / man day
  • Offshore: 200 dollar ‎/ man day*

* Taking into account that this is the average across resources scoping & design, development and testing. Some of the work cannot be carried out offshore. Also double development effort ‎as overheads in communication, lack of business understanding, cultural differences will usually double the effort. In addition to this we find that enterprise apps are much more fit for offshore than marketing apps that require a lot of additional design work.

So what is the cost of developing a mobile app?
Based on the resource estimates above you can now calculate the cost yourself based on your needs. The cost ranges from 100-150,000 dollars based on offshore development (with the research, ideation and scoping carried out internally) to 200-350,000‎ dollars for partnering with an experienced agency doing the work.

So what are good examples of apps with these kind of budgets?
We’ve developed over a thousand apps to date and to give you an indication the first versions (MVP) of the following apps were based on the effort and budget indicated above: MIXED cocktails by Bacardi, Addison Lee app‎, myTikr, London Heathrow, O2 Priority Moments, Radeeus and Bloomberg.

So do all apps cost the same to develop? Of course not, but 5-6 months lead time for a consumer or enterprise app is pretty average today.

Do you have questions or disagree with our methodology, estimates or costing model?‎ Contact us and we will provide you with more information.

Tags: app development development cost mobile apps

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