How much does it cost to create an app? [7 calculation formulas with examples]

If you need a software product but are still on the fence, trying to estimate how much it will cost to build an app, this post is for you.

Of course, no post can give you an exact quote because your project is unique and the final price will vary based on your objectives. But what we can do is guide you on how to calculate the app development cost using a few straightforward tips.

In this post, we’ll explain in detail what affects the price as well as run you through formulas and calculation examples you can use for your specific project.

If you want an exact quote for your project, contact us here.

So, let’s dive in.

Table of Contents

• Balance your priorities
• Understand the price in the equilibrium
• App development breakdown
• How much does it cost to develop an app? (Calculation example)
• Other factors that affect the cost

Don’t choose between quality, cost, and speed: Have all three

Let’s start with the most basic thing you need to know before the project kicks off. You can’t develop a high-quality software solution fast and at a cheap cost. There is no such thing as a free lunch, and if a development provider tells you the opposite, it’s a red flag.

However, you don’t need to sacrifice one of these either. Look at the triangle below. This shape represents your three main priorities during software development: cost, speed, and quality. Unlike the common belief, you don’t need to pick up only two of three attributes. Can you see the small area right in the middle? That’s your goal.

See also: How to develop a strategy for startups and not only

To better understand what we mean, imagine that you’re at the market and want to buy apples, pears, and apricots. You have only one basket that can hold 2 kg. You can choose only 1 kg of apples and 1 kg of pears. Or you can buy 666 g of each fruit, including apricots. The same applies to development. You can have speed, cost, and quality in balance.

Understand the price in the equilibrium

Now that you know that you don’t need to give up on the quality or speed, you need to understand how they affect software development costs. It’s simple: the faster or more complex the development you choose, the more you’ll need to pay.

Note that we’ve chosen the word “complex” here for a reason. A simple app can be built by a mediocre developer (read “cheap” here). But if you need a more complex solution, an inexperienced developer and sloppy code can cost you the entire project.

The equilibrium of quality, speed, and cost suggests that your sweet spot is not the lowest possible app development price, but a perfect combination of these factors:

• Lower rates compared to domestic in-house team or domestic software development agency
• Development experience and expertise
• Professional service level, including English and communication skills
• Low risk of project failure

The combination of these factors is also the reason why different markets have different price tags. 

Source: 2022, Global software outsourcing trends and rates guide

Let’s take a quick look at the two most popular markets for outsourcing.

South Asia

Developers from India and Pakistan charge comparatively low rates, meaning that a mid-level developer will cost you only $28-$35 per hour. However, you can end up with low-quality and slow development.

Indian developers have a long list of religious and state holidays that they usually follow. Besides, Asian culture differs from the Western one, and you will probably need to micromanage the team. Asian developers may lack initiative and they avoid confrontation, which can result in less honest feedback than you expect.

Eastern Europe

The average cost to develop an app in Eastern Europe, on the other hand, is only 20-30% lower than in the USA or UK. A mid-level developer will charge you around $40-$71 per hour. However, the quality and speed of development are of a Western standard.

Eastern European countries like Ukraine are flooded with experienced developers known for their responsibility and diligence. You might wonder what makes the software development price go down in this case. In short, this happens due to the following:

• Competition
• Team remoteness
• Culture difference

Learn more about IT outsourcing in Ukraine: Bring your project to Ukraine

The last two factors don’t impact the overall development speed (read cost) directly. Yet the way vendors and customers interpret information during remote meetings will depend on their cultural and regional backgrounds. As long as those differences fill the business language with nuances, it’s not uncommon for customers to face slight misunderstandings or unmatched expectations.

To avoid this, project managers on both ends have to set clearer objectives and be ready to make communication a substantial part of the development project.

Region	Dev. cost	Dev. speed	Dev. quality
South Asia India, Pakistan	Extremely cheap ~$25 per hour	Low 2x	Low
Eastern Europe Ukraine, Poland, Romania, Belarus	20-30% cheaper ~$50 per hour	Usually high, but there can be communication difficulties 1.2x	High due to deep talent pool and alignment with Western standards

Let’s look at the factors that affect the app cost.

App development cost breakdown

This section will discuss how the app development cost is formed. We’ll run through the main questions you need to ask yourself. Then, we’ll explain how the app price changes depending on your answers.

Spoiler: be ready to write down formulas.

10 Questions to ask yourself

Here are the three main questions about your future application and its functionality.

Which platforms are you targeting?​

Questions	Example of Uber-like application
1. Which platforms are you targeting?	Uber has web and mobile applications (both iOS and Android).
2. How many different types of users will use your platform?	The Uber platform is used by drivers and passengers.
3. Does the platform need manual administration (human intervention)?	Uber has a team that administers rides and has access to the confidential information of passengers.

 

If you need a mobile application, here is one more question to consider:

Is the app a simple minimum viable product (MVP) or a proof of concept (POC) whose functionality doesn’t depend on the capabilities of the device system?​

Questions	Example
4. Is the app a simple minimum viable product (MVP) or a proof of concept (POC) whose functionality doesn’t depend on the capabilities of the device system?	The functionality of augmented reality or Bluetooth depends on the system on which the app is running.

Now, you need to understand the team structure and the level of control you need over the development process. Here are six more questions to think of:

5. Do you need a person who will test the stability of the developed application?
6. Do you need to design how the application will look (graphic design and user interface)?
7. Do you have a strong brand identity?
8. Have you clearly outlined the main problems and the ways of solving them?
9. Do you have clear algorithms with flowcharts for problem-solving?
10. Do you need a manager who will control the development process, as well as predict, mitigate, and address issues as they arise? This includes risk assessment, setting of goals and objectives, weak point identification.

How do your answers affect the cost?

The initial development time needed for your project will increase or decrease depending on your answers. Let’s get straight into this.

Number of platforms

You need to multiply the initial development time by the number of platforms +1 for backend development if you have more than one platform. If you target three platforms (web, iOS, and Android), multiply the initial time by 4. If you have only one web platform or one mobile platform (iOS or Android), the initial time won’t change.

Initial time x (the number of platforms + 1)

 

Note that you need to understand the difference between platform development and design because these two processes require different amounts of time. We’ll explore this in more detail below.

User types

Multiply the development time by 1.75 for an additional user type. So, for example, if you want an app like Uber with two user types (drivers and passengers), multiply the development time by 1.75.

Dev time x 1.75 per additional type

Manual administration

If you need manual administration (deletion, editing, adding, or viewing user data), developers will build an additional portal (admin panel) with restricted access. The admin panel should be developed after the backend system is ready, allowing you to visually control it. 

The development of the admin panel usually takes half of the time needed for building the backend system.

Dev time + 0.5 x backend development time

MVP / POC project

For a simple MVP project requiring both iOS and Android apps, you can take advantage of cross-platform development. Note that it doesn’t cut the total development time by two. Due to the differences between Android and iOS platforms, developers will still need to code some elements separately for each platform.

Cross-platform development will save you 20-30% of the total mobile development because developers can merge iOS and Android projects into one.

Dev time – 0.2 x mobile development time

Stability testing

Developers make mistakes and don’t consider all possible user scenarios (for example, how the app should act if you receive a call while using it). Neither the client nor developers can identify all insufficiencies. For this reason, we always recommend having a person trained to spot the app’s weak points, improve the development quality, and save costs on solving issues.

Testing takes half of the time needed for front-end development (including web, iOS, and Android platforms) and usually takes 0.65 of the front-end development time.

Dev time + 0.65 x (0.5 x front-end development time)

Learn more about software development quality assurance here

UX/UI design

Documentation on UX/UI design gives developers a clear understanding of the app’s interface, element placement and their interactions, colors, fonts, etc. You can’t develop an app without its UI and UX design, just like you can’t build a building without architectural planning.

UX/UI design for one platform takes half of the time needed for the front-end development of this platform. Note that a platform is either mobile, web, or desktop. Android and iOS will be counted as one platform due to the similar approach to their design.

Dev time + 0.5 x front-end development per platform

See also: 10+1 steps to building UI/UX design for startups

Management and problem-solving

The processes of a software development project are similar to those of a construction project. Just like a construction foreperson controls a construction site, you may need a specialist who will ensure that development tasks are performed correctly and on time. 

Managers spend the time equal to the sum of all person-hours divided by 12. So, to manage an average team of 5 specialists will require around 2 full-working days (3 hours per day).

Dev time + (the sum of all person-hours / 12)

If you feel a bit lost after so many formulas, don’t be. Let’s see how we calculate the app development cost in a real example.

How much does it cost to create an app? (Calculation example)

Here, we’ll calculate the average cost to build an app for two different projects using the formulas above. The average development time is 2 months (336 hours), so we’ll use this in our calculations.

An app like Uber

Before we start, here are a few things we need to take into account:

• This app will be used by two user types: drivers and passengers.
• The application should be built on iOS and Android platforms to cover more passengers and drivers. This will also ensure that drivers have enough clients, and passengers can always find a driver nearby.
• The application will require manual administration (deletion of drivers, communication with clients, etc.)
• The application development won’t be short, so we’ll need a manager.
• We can’t save money using cross-development because this project isn’t simple. Even Uber has recently converted its React Native apps into native iOS and Android apps.

User type We have 2 user types, so we need to multiply the development time by the coefficient.	Initial time x 1.75 per additional type	336 x 1.75 = 588
Platforms The app will be built for iOS and Android platforms, so we need to calculate the time needed for the backend development too.	Dev time x (the number of platforms + 1 for backend)	588 x (2 + 1) = 1,764
Manual administration (admin panel) Admin panel development takes half of the backend development time.	Dev time + 0.5 x backend development time	1,764 + (0.5 x 588) = 1,764 + 294 = 2,058
Testing To calculate the time needed for testing, we first need to calculate the time needed for front-end development, divide it by 2, and then multiply by the coefficient.	Front-end development = Total time – backend – admin panel development	2,058 – 588 – 294 = 1,176
	Dev time + 0.65 x (0.5 x front-end development time)	2,058 + 0.65 x (0.5 x 1,176) = 2,058 + 382.2 = 2,440.2
UX/UI design We should count iOS and Android as one mobile platform. Since we calculated the time needed for the front-end development for iOS and Android, we need to divide this value by 2 and then apply the formula.	Dev time + 0.5 x front-end development per platform	2,440.2 + 0.5 x (1,176 / 2) = 2,440.2 + 294 = 2,734.2
Management To calculate the time needed for managers, we need to divide the total development time by 12.	Dev time + (the sum of all person-hours / 12)	2,734.2 + (2,734.2 / 12) = 2,734.2 + 227.9 = 2,962.1

The total development time is 2,962 hours on a domestic market.

Note that the total time we’ve calculated is not the project timeline, and many processes will be performed in parallel, as shown in this chart.

If your domestic market is USA or UK, then here is how the speed and cost of making an app will change if you outsource development from India or Eastern Europe:

Market	Average rate	Average speed	Your project duration and cost
Domestic market (USA, UK)	$100 per hour	1x	2,962 hours $296,200
Eastern Europe	$50 per hour	1.2x	3,554 hours $177,700
India	$25 per hour	2x	5,924 hours $148,100

A fitness app

This project is much easier than the first one. Developers can build the app on one platform (for example, iOS) since the app users don’t depend on each other. You also won’t need to invest in backend and admin panel development for the same reason.

If we use the same formulas from the first example, we’ll get around 664 hours for a project. This includes the time needed for a designer, a manager, and a specialist responsible for stability testing.

Here’s how the fitness app development cost will change in different markets.

Market	Average rate	Average speed	Your project duration and cost
Domestic market (USA, UK)	$100 per hour	1x	664 hours $66,400
Eastern Europe	$50 per hour	1.2x	797 hours $39,850
India	$25 per hour	2x	1,328 hours $33,200

We wish we could say that you finally have the approximate project cost. But in fact, we covered only the tip of the iceberg. Depending on the project scope and team size, you may need a different software development pricing model. You can request a fixed price, pay on a time and material basis, or go for a dedicated team of developers.

Other factors that affect the cost

Here are other factors that you need to keep in mind when planning the project budget:

Maintenance

App maintenance depends on your plans, and its cost can vary significantly for each app.

Fixing small issues occasionally and collecting data for the next version requires around 2 hours per week. Collecting user feedback and turning it into reality may require up to 16 hours per week, which is full-fledged development rather than maintenance.

We recommend allocating 8 hours per week for maintenance so that developers can focus on the project without being distracted by other things.

Niche specialization

For artificial intelligence and blockchain technologies, you’ll need developers with proper specialization and experience. Usually, it’s harder to find such specialists, and their hourly rates are 20-30% higher.

SEO

Though SEO may seem irrelevant to web development services at first glance, there is a catch. For SEO tasks, you’ll need an SEO specialist who can run an audit and help you find what to improve. And the developers will need to apply SEO recommendations to the software they are working on.

A simple example: landing speed is crucial from the SEO perspective, but SEO can’t improve the landing speed. Developers will need to use special tools to maximize the performance: server-side rendering (SSR) or static site generator (SSG). The use of these and other tools can affect the web development cost.

Store publishing

Before publishing your app on the App Store, Google Play, or Huawei AppGallery, you’ll need to receive approval from these platforms, and this process can drive the mobile app development cost up. Though receiving the approval doesn’t take as long as development, it does take time. You need to upload the app for review and wait for the reply, which usually takes two days. Then, developers need to tweak the app according to the platform’s feedback and upload it again. This process is repeated several times until the app is finally approved.

Apps with integrated payment systems, betting or casino apps, and apps that collect user data will take longer to verify, and you will also need to provide more documentation. Also, note that both App Store and Google Play charge app developers an account fee ($100 and $20, respectively).

See also: The 8 startup tips you need as a young founder. Thank us later

Wrapping up

Estimating app development costs can be a daunting task, but it is worth the effort. Understanding your priorities and factors that affect the final cost will help you discuss the price with your development provider more effectively.

In this post, we’ve covered the basics of software development pricing, but if you want an exact quote, contact us! At NERDZ LAB, we offer full-scale development services for both established businesses and startups. Whatever your needs are, we know how to get your app running at a fair cost.