How Much Does It Cost to Create a Custom App?

According to the Kinvey report, many organizations spend an average of $270,000 on the creation of their custom-built mobile application. And the completion of the process supposes, in most cases, a year from the approval of the project until the launch of the complete app. Although each application is unique and has particular specifications that directly affect the final price that its creation will reach, the reality is that these budgets are only available to large companies with many resources.

In addition, the process of creating an app, depending on the approach taken, can be so complex that many of the projects that are started are never published. Fortunately, custom developments are not the only alternative that companies have to create an app. Today it is already possible to create applications as advanced as those made to measure, thanks to reputable software developers.

In this post, we are going to show you all the factors that influence the final price that a custom native app creation project can reach, why they are very time- and money-intensive projects – they can reach USD 200,000 and take longer than a year in its development.

How Do You Calculate How Much It Costs to Create an App?

It’s the million-dollar question. For this reason, before analyzing all the factors that influence the final cost of a custom-developed app, I am going to tell you what you must take into account to calculate its price. Before starting, you should know that there is no magic formula and its price may vary depending on its specific characteristics because not all apps are the same or have the same requirements.

In the first place, companies or entrepreneurs who launch their app development can spend from $20,000 for the simplest apps to $200,000 for more complex applications.

But how does an app development company calculate the price that the entire process will cost? The formula is simple:

App Cost = Performance Time x Cost per Hour

We explain them. Development companies calculate the cost by multiplying the hours they spend developing each function included in the app (performance time) by the price they charge per hour. Let’s take an example so you can see it. Imagine that you want to create an app that has five main features. The first thing that the development company will do is calculate how much time it will invest in developing each of these functions.

Function 1: 50 hours   

Function 2: 40 hours   

Function 3: 70 hours   

Function 4: 100 hours

Function 5: 80 hours

In total there are 340 hours for the 5 functions. If you hire a development company that charges, for example, $120 per hour, the result will be $40,800 for the creation of your app. You can find cheaper or even more expensive options, but in this example, you can see how they budget the development companies creating an app.

This is an example of a simple application, with only five functions. But there are also more complex apps, which can take up to 1,500 hours of development. And how do these companies define their hourly rates? Why do some charge more and others charge less? Mainly because of its location. That is a big difference. A development company based in the US or UK will be considerably more expensive than in India or Ukraine, for example.  The average hourly price of an app development company based in the United States or Australia is usually $150/hour. In Europe, they are around €100-120/hour, but if you go to countries like India, we are talking between $20-$80/hour, and this will undoubtedly affect the quality of development.

Secondly, another factor that will affect the final price of a custom native app is the platform on which it will be published. It can be on iOS or Android, or both at the same time. The price for each of them will be different.

Thirdly, the number of functions that the app will include will be decisive for its final price.

So…are you now ready to create your custom app?