App Development Cost in 2023

Desire to digitize or scale a business and launch your own startup always leads to a crucial question: how much does app development cost? However, you will never receive a definitive answer, as contractors always calculate the cost individually.

• Figures like $50,000, $100,000, or even over $300,000 per project are generalized estimates that rarely reflect reality.

You must consider many factors to prepare to create an app for your business and at least roughly estimate the cost.

Analysts from Lampa Software have prepared a detailed overview of budget formation for software development projects. From this material, you will learn the following:

• The industry's current state and its impact on the cost of work.

• The combination of factors involved in determining the development price.

• The dependency of app development pricing on the working region and type of collaboration.

• Additional factors that influence the final project cost.

• Recommendations on how to reduce development expenses.

• Tips for choosing project contractors.

Let's start the topic overview with generalized information about the market status and the benefits of app development to businesses.

Digitization: Benefits of Implementing Custom Software

Before we delve into forming application development costs, let's look at some key figures in the IT industry.

• According to Statista, approximately 6.9 billion active smartphones are connected to the Internet. Considering that an average person owns around 4 devices, the potential audience for your app amounts to roughly 1.7 billion users. That is, if you plan to scale your IT solution to an international platform.

• The most promising niche for digital solutions lies in SMP (Social Media Platforms), such as Facebook, YouTube, Instagram, and WhatsApp. Each of these platforms boasts an average of 2 billion active visitors 

Thus, we can conclude that digital solutions are popular worldwide and can be monetized effectively through advertising and other means, such as premium features and paid functionalities.

However, to achieve the highest ROI, it is essential to minimize development costs. This is especially true when considering the average budgets for different types of software.

How Much Does Mobile App Development Cost?

App development cost is estimated individually. You need to understand this key point before you start working. Yes, you can use a special calculator, tables, or approximate prices, but you will only get a superficial idea of the real cost. For example

It doesn't get any clearer, does it? And that's because you can't calculate the real app development budget without an in-depth understanding of software architecture, development principles, design, and knowledge of the real prices of service providers.

That's why Lampa Software specialists have prepared a detailed overview of the factors that influence pricing. 

What Affects the Cost of Application Development

A range of factors, such as the scale and niche of the software, app features, multi-platform compatibility, and more, influence pricing. You should also not forget the cost of hiring project contractors, their work region, and their skill level.

• Development hours, timeline, team size, tech stack, and more are also factors that influence pricing when creating a product.

There is a direct correlation between what you need to add to your app, the time required to develop and integrate these components, the hourly rate of professionals, and, consequently, the development cost for an app. We will delve further into these aspects by examining three key pricing factors.

Application Type

Depending on the type of software, its cost may vary. Here's a typical example of pricing when working with an offshore team:

• Offline standalone: ~$5,000

• App with moderate online connectivity: ~$12,000

• Chatbot app: ~$19,000

• IoT and wearable application: ~$28,000

• Messaging application: ~$35,000

• Augmented Reality / Virtual Reality: ~$45,000

• On-demand app: ~$50,000

• M-commerce: ~$40,000

• Mobile social networking: ~$50,000

• Enterprise mobile: ~$60,000

Or another example:

This cost difference is due to the number of features you must build into the software to make it work properly. The examples show a consistent price increase according to the digital solution's functionality and scale. And this is almost the minimum price, considering the regional peculiarities of development.

Region

There are five typical regions for outsourcing development: the United States, Western and Eastern Europe, China, and India. And there is a nonlinear gradation of app development costs based on factors such as:

• Development quality.

• Internal economic situation.

• Hourly rate of professionals.

• Contractors expertise.

• Speed of work.

The average hourly rate in the US is around $100+, while in Western Europe, it ranges from $45 to $60. These are currently the highest rates but correspond to the development quality. However, they are justified only when you cannot collaborate with more cost-effective regions.

• In Eastern Europe and Asia, the hiring costs are somewhat lower, ranging from $25 to $40 and $13 to $30 per hour, respectively. It is worth noting that Eastern Europe, especially Ukraine and Poland, offer an ideal balance of quality, price, and flexibility to collaborate from any region.

On the other hand, India has the lowest rates in the market, perhaps due to the high density of developers (and thus competition) in the country. Rates there range from $3 to $15 per hour. However, opinions differ when it comes to quality. Some receive high-quality code with minimal issues, while others face projects that need to be reworked from scratch.

To summarize, Eastern Europe, particularly Poland and Ukraine, are top choices for outsourcing IT projects. Don't believe it? Reach out to the managers at Lampa Software and see for yourself the expertise of their professionals!

Complexity

App development costs also depend on the complexity of the app you need to implement, including the number of features and screens that need to be developed, the design, and the navigation architecture used.

• If it's a simple digital product with minimal functionality (like a calculator or an offline notepad), the average cost will range from $5,000 to $10,000.

However, when we talk about equivalents of hypothetical Instagram or Uber, these are complex platforms that combine rich functionality, modern design, and advanced technical solutions. Consequently, building an app of this scale can easily deplete the budget of a small startup or even an SMB.

For such software, you would need to allocate at least $100,000 for the app project alone and further invest in app marketing and IT solution upgrades. But finding an optimal development agency might change the situation entirely.

Types of Collaboration in Application Development

The costs for app development also depend on the collaboration model you choose with the service provider. The app budget influences whom you hire to implement the IT solution.

There are four common options:

1. Local development companies (onshoring or nearshoring).

2. Building an in-house team.

3. Delegating tasks to freelancers.

4. Full outsourcing of development.

Let's evaluate them in more detail to determine the best model regarding quality, development time, and the cost of hiring professionals.

Hire a local agency

This is an ideal collaboration option if you don't live in the US, Canada, or Western Europe. This model reduces the risk of breakdowns in application development and allows for better synchronization of working hours, project management, and more.

This is possible because the service provider is located in the same time zone or even the same region as you. As a result, communication and the quality control of work and progress monitoring will improve. The cost of hiring directly, however, depends on the region.

Build an in-house team

Hiring a complete development team is a good option if you wish to launch your own technical startup. However, you must be prepared for high short and long-term costs.

This includes fixed monthly salaries for all employees, purchasing and upgrading equipment, skill development, and more. And once again, the cost depends on the region. For example, maintaining an in-house team in the US is nearly five times more expensive than in Eastern Europe.

Work with freelancers

The lowest app development cost in 2023 is hiring an external individual to develop your project from scratch. However, it is also the riskiest approach, as issues with deadlines or app quality may arise.

Nevertheless, it is the most affordable way to bring your app idea to life, regardless of the working region or the hired professional. Moreover, you won't need external specialists such as QA or designers, as the freelancer creates the project independently, delivering a ready-to-use digital product to you.

Outsource app development

This is the optimal option to obtain a cost-effective mobile app development cost and achieve high final quality in your IT solution. To start collaborating with outsourcing experts like Lampa Software, you need to describe the concept, choose the development timeline, and discuss the estimate and further maintenance.

The development process will then start, and you can remotely monitor the progress of work and track other metrics. The team will handle all the accompanying operations and deliver a fully-formed and ready-to-launch IT product.

By the way, the development service estimate will provide a detailed breakdown of the cost for each development stage.

Distribution of Application Development Costs by Stage of Development

If you want to calculate mobile app development costs more accurately, break down your future project into stages and calculate the cost of each step. We can assist you in this by describing each software development stage from a financial perspective.

Please note that the figures provided here are approximate and do not reflect the current market situation. Furthermore, each company individually calculates the cost of its services, so keep that in mind before ordering software development.

Discovery Stage

Since most clients consider this stage insignificant, they are willing to allocate around $5,000 to $10,000. Considering that it includes market analysis, concept and idea exploration, competitor research, project shaping, and many associated operations, this cost for the stage is justified.

Quality analytics and research results can be used to attract additional investment, increasing the budget for subsequent stages.

UX and UI Design

UX and UI are crucial factors influencing a product's market success and overall popularity among the target audience. Therefore, it is essential not to cut corners during this stage. Although, as practice shows, most entrepreneurs are willing to spend less than $10,000 on UI/UX design. However, a significant number of those who understand the value of this stage allocate $15,000 to $25,000 or even more for it.

Mobile App Development

The mobile app development stage is one of the most critical processes of the entire project. The costs for this stage average around $10,000 to $50,000 or even more. However, this depends on several factors, such as developers' skills, the number of features, and the technologies and frameworks used to create the IT solution. Typically, this stage constitutes a significant portion of the total mobile apps development costs. 

App Testing & Deployment

Usually, up to $10,000 is spent on QA services and software deployment within a single project. The amount may vary depending on the type of software, its scale, and the owner's plans. If you want to avoid future costs due to low-quality IT solutions or technical issues, it is essential to thoroughly test your software during its development.

Investing in QA positively impacts the success and overall viability of your digital product in the industry. However, even these costs can be somewhat reduced.

How to Cut Mobile App Development Cost

Did you know you can reduce mobile application development costs using a few methods? These methods won't affect the quality of your IT solution or its deployment speed. But, besides cost reduction, they offer several advantages.

The experts at Lampa Software will share some life hacks with you to help you save money and efficiently use your development budget.

Cross-Platform Development

Focus on implementing a cross-platform app or hybrid app instead of creating separate native apps, i.e., iOS app and Android app. The idea is to develop a single software version that can be adapted to different operating systems.

For example, if developing a cross-platform app costs around $80,000, developing each separate version would cost around $50,000. This results in savings of $20,000 that can be allocated to other project needs.

MVP First

Always leave room for maneuvering and avoid trying to pack all your ideas and concepts into the initial release version. Limit yourself to the minimum functionality that will help you bring your IT solution to the market. This is not just an opportunity to save money; let's look at the bigger picture.

• Releasing an MVP allows you to assess how the audience perceives your digital product. Additionally, monetization methods can generate revenue if incorporated into the release. It also demonstrates to potential investors your mature and effective strategy.

Moreover, it allows you to respond more effectively to potential criticism. For example, suppose you gather feedback from dissatisfied users with a specific feature. In that case, you can modify it according to their preferences and state that it was always part of the software's development concept. Profit guaranteed.

Design and Development by the Same Agency

Incorporating comprehensive services guarantees savings in both budget and time. For instance, if you are developing a product, you will need not only programmers but also designers, analysts, project managers, QA engineers, and more. You can either gather the necessary experts from multiple companies or engage freelancers.

However, this approach is time-consuming and less efficient than outsourcing the project to a consolidated team, such as Lampa Software. The comprehensive services help you save money and improve the final quality of your IT solution.

Use Off-the-Shelf Solutions

Custom development based on an original concept is a top-notch solution if you are not budget-restricted. Otherwise, it is better to reduce, for example, the simple app development cost by using template-based development.

Numerous SaaS platforms provide the foundation for building unique mobile or web applications. You can reduce costs by relinquishing the back-end and investing in the front-end, design, and UI/UX. 

Avoid Supporting Legacy OSes and Device Models

Forget about older generations of devices and operating systems. Investing in adapting software for them is generally not cost-effective. Focus on current system versions released in the last two years and future generations. Consider modern smartphones' peculiarities and technical specifications rather than hypothetical phones based on MT6589.

Also, remember that software development includes several hidden cost items that are not directly related to the process of building the IT solution.

What to Pay Attention to When Choosing an App Development Company?

We've reached a crucial point: the methodology for selecting a contractor who can quickly and efficiently implement your project. The company's policies also strongly impact the final mobile application development cost. It's important to carefully evaluate all available options for experts who can handle the development tasks.

Let's consider what you should prioritize when searching for professionals.

Determine your application requirements

You should have a clear concept of your future software when looking for developers. This will help you select candidates with the appropriate accreditation and skill profiles more quickly. It will also enable you to communicate your project specifications effectively to the developers, avoiding misunderstandings and potential issues.

Try to choose full-service companies

Delegate the development tasks to companies that fully meet the project's needs. They will provide analysis, project management, development, design, technical architecture, API integrations, QA, deployment, and support. This is how it's implemented at Lampa Software, a mobile app development company with experts from all necessary profiles for your project.

Interview the developers in person

Most contracting companies offer free consultations. Take advantage of these opportunities to talk to the organization's managers and experts. This will allow you to assess their level of expertise and industry-specific experience. You'll also get a chance to get to know the team and decide whether you want to entrust them with your project.

Study the company's portfolio

Review its work portfolio to better understand its experience, typical project profiles, and the technologies they utilize. While case studies may not always reflect reality accurately, they provide basic information about the execution capabilities of the project team.

Find out about the company's privacy and data security policy

In addition to the above, it's important to ensure that your idea remains your own, including its unique concept. Familiarize yourself with the company's privacy policy and sign an NDA as early as possible. This will help protect your copyright for the digital solution, including its design, functionality, and more.

• Of course, you can take on the challenge of finding a company that perfectly suits your needs. But why waste precious time when you can quickly delegate your project to the experts at Lampa Software?

We will help you test the concept and develop an MVP in minimal time so you can present it to your target audience. From there, we will handle the modernization and scalability of your software while you enjoy the profitability of your successful investments. Profit is guaranteed!