Annual mobile app downloads are expected to reach a whopping 102 billion this year, up from 64 billion in 2012, according to a Gartner prediction. Entrepreneurs and businesses are also making record amount of money through apps. Apple alone has paid out over $10 billion to third-party app developers and Google Play applications are bringing in over $1.1 million in daily revenues.

That said, the cost of developing an app for the first time can be prohibitive, especially when just testing the waters and assessing customer demand.

Here are four ways to save on costs when developing your first app:

Don't put the cart before the horse.
Did you know that the first version of Gmail was literally built in a day? That's what the creator and lead developer of Gmail, Paul Buchheit claims.

Unless you're sure of market demand for your app, do not go the full course in developing a complete app with all the features. The fact is, you will never know the reception for your app until users start using it.

You want to use minimum resources to identify market demand. You can do that by creating an app that offers only the core value of the product -- that one reason or feature you anticipate will drive customer to download and use your app.

All the other periphery features can be added later as app updates, constituting the bulk of the development effort. This is called releasing a Minimum Viable Product, or MVP. Successful products have evolved over a period of time through constant customer feedback. Just think of Gmail and all the useful features it's developed over the years.

Don't spread your wings, just yet.
Wouldn't you like your app to be available to most smartphones users to maximize downloads and make money? Surely, we'd all like that.

But, even if you're certain customers will want your app, there's still a good chance you'll be surprised by their feedback. The first instance of your product is never the final one. It will inevitably evolve over time.

That's why you should target just one app store to begin with. You have limited funds. Why create something across platforms that no one wants?

Develop for one platform, either iOS, Android or Windows. Choose a platform based on where your customers are.

Once you get it right on the first platform and see good traction from users, you can aim to provide a similar experience to users on other platforms.

Don't reinvent the wheel.
Many services out there provide app developers with shortcuts when building the first iteration of their app.

In developer-speak, these are called SDKs or library of resources. There are many resources that offer various application features and functionalities for a fee. For instance, if you want to develop a chat or messaging feature in your app, rather than building and maintaining the functionality from the ground up -- a huge cost -- simply subscribe to a third-party service that embeds chat features into your app.

Some useful examples include:

Don't build a team.
One other way to keep costs low is to go with an outsourced provider that understands your requirements rather than hiring a team.

The most important thing for you at this moment is to get your app in the hands of the customer. Outsourcing the design and development will save on the cost of hiring a team. It will also bring your product to market much faster because you'll save time not having to recruit and hire a whole team from scratch.

If the idea of outsourcing makes you uncomfortable, know that some of the most popular products used today were outsourced in their initial days -- Alibaba, Fab.com, Digg and Skype.

Developing apps for the first time can be daunting and the design and development costs don't make it any easier. When trying to reduce costs, be sure you do not compromise on the quality or core value of your app.