The 5 Hidden Costs of Building a Mobile App

The expense of creating a mobile app doesn't have much to do with its actual features but more so with the infrastructure required to build them.

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By Rahul Varshneya


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Have you reached a stage where you've got your idea down on paper and are raring to get into action -- to develop and launch your mobile app? If yes, the most pertinent question for you at this stage would be how to evaluate the right partner for development and the cost of developing the product. If you've already done some research in the market, you've probably come to realize that this industry is incredibly fragmented with costs ranging from $15,000 to $500,000 to develop the first version of an app.

So where do you go from here?

Related: A Beginner's Guide to Starting and Marketing an App

Over the last five years, I've helped startups and enterprises build over 150 apps and websites across platforms. I've learned a lot about how to find the right development partner and at the right cost, and I outline the crucial elements that will influence the cost of building a mobile app so you can make an informed decision.

A couple of points to note though before you move forward. Building a serious mobile app business requires a team and not a freelancer, where there are far greater risks. If you're looking at hiring a freelancer, then this article isn't for you. Secondly, there's no such thing as a great quality app that is developed quickly and is inexpensive to make.

1. Your priorities or objective

One way to choose between development partners is to lay down your priorities or business objectives clearly on the table. Open all your cards and evaluate what's really important for you in the first phase.

Are you willing to sacrifice the visual design and a great user experience for a highly functional application that will help you validate your concept? This may result in bugs and workflow issues pertaining to some of the use cases, but it will help you get to the market with a functioning product to help you validate quickly and in a less expensive manner.

Whereas, if you were to build a Tinder competitor or an on-demand app, users of such categories and apps have already experienced greatness and would expect that at the very least from your end. You could get a first version of the product that has backend involved developed for under $15,000 in the former mentioned above. In the latter, you're looking at costs over $25,000 depending on the complexities involved.

2. Quality of resources

In the software development industry, you get what you pay for. The biggest cost in the development of a mobile app is the cost of labor or resources that will help put it together.Quality of resources, specifically in the software industry, is directly proportionate to the pricing. The reason is that the demand for quality developers far outweighs the supply, and a good developer is often paid above industry standards to retain them.

And this directly translates into the quality of app that these teams would develop for you. When two companies have a difference of over 50 percent in pricing, you pretty much know what you're paying for.

Go back to point number one and reevaluate what's important to you.

Related: A Step-by-Step Guide To Building Your First Mobile App

3. Onsite versus offshore

Developers in the developed markets will almost always be more expensive than those in the developing markets -- there's really no rocket science here. It's as rare to find a $150 per hour developer pricing in India, as it is to find a $12 per hour developer pricing in the U.S.

Whether you develop in the U.S. or India will have a great impact on what you get quoted. Software development has been and continues to be outsourced to offshore companies mainly for two reasons: availability of good quality resources in big numbers and the cost benefit. For instance, many of Apple's software that you use in your Macbook are developed and maintained in India.

4. Infrastructure

One of the biggest components that add up to the cost of building a mobile app isn't really the features but the infrastructure required to build them. For instance, third-party application programming interfaces (APIs) are out of the control of the developer's environment and can really raise the costs dramatically. Then, there is data storage (in-app or backend database) and the method it would use depending on the complexities can have a greater impact.

If you anticipate good traction for your application, the scalability has to be engineered at the foundation level -- not in the app but at the backend. Based on the complexities of your application, the intensity of these greatly varies, thereby impacting the costs. These are some of the most crucial elements in your app requiring an expert hand to work them.

5. Estimation or project understanding

This most often is an underlying factor but doesn't always come up at the forefront. But it does have a significant impact on the costs of building an app.

Does your developer or the stakeholder that's interacting with you from their end really understand your requirements down to the absolutely necessary details? Most often, many elements are left to assumptions, and if they are not clarified or brought upfront in the initial discussions, they cause heart burns at a later stage, thereby increasing the costs mid-way and hampering the relationship.

Related: 2015 Will Likely Be Known as the Year of Mobile Commerce (Infographic)

Rahul Varshneya

Co-founder at Arkenea

Rahul Varshneya is the co-founder of Arkenea, an award-winning web and mobile app development agency.

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