App development is a complex process that involves so many specifics that it's no surprise many customers are puzzled by how to dispose of their budget. That's why our team decided to shed some light on the required costs to start an app that some entrepreneurs might find unexpected.
In this post, we'll outline some costs of running an app you may not have anticipated in order to protect you from unexpected bills during the product development. Also, you'll see approximate prices on each expenditure.
What costs are you talking about?
People who decided to entrust the realization of an app with outsourcing companies or even in-house developers don't always know what this process is actually like. Respectively, they can face some pitfalls if the budget is based solely on mobile development expenses. For sure, development is the core stage but you should bear in mind additional costs of app development like UI/UX design, testing, and maintenance.
Talking about the cost of outsourcing IT services, we should mention that each company has it's own price policy. While some companies may include testing and temporary maintenance in the development bill (like we do), others estimate them separately. In case you decided to form the in-house team for your project, take into account that you need separate specialists at least for design and testing.
Read full article about the most advantageous contract you may conclude with an outsourcing company or watch our short video underneath
Which Type of Outsourcing Contacts is the Most Suitable for Your Business?
Moving to other expenses, app owners should pay fees to submit the app to marketplaces like App Store or Google Play, as well as pay the bills for hosting and software licenses (if required).
Costs of publishing an app
Well, if you're still reading this article -- you need more details, isn't it? Let's sort out what expenses you will be faced with after you get the ready-made app.
1. App store fees
If you're intended to distribute your app through popular marketplaces like App Store, Google Play or Amazon Appstore, you should be aware of app store fees. They aren't so high but still, app publication and transactions within the marketplace aren't completely free of charge.
Apple App Store Fees
Cost to publish an app on Apple App Store is as much as $99 per year of membership for individuals and organizations that plan to distribute their apps through App Store. For this price, you get all the necessary tools, access to beta releases, and of course the right to publish apps for iOS, watchOS, and MacOS. However, there is another pricing for enterprises which created own apps and want to distribute them exclusively among their employees. In this case, the price is $299 per year and includes some additional enterprise-focused features. Besides, remember about App Store transaction fee in 15% (e.g. you sell app/in-app purchase/subscription for $9.99 -- get $8.50).
Google Play store fees
The cost to upload an app to Google Play is another small expense in case your app is cross-platform. This marketplace charges a one-time fee of $25 for the registration of Google Play Developer account. Besides the transaction fee is 30% (e.g. you sell app/in-app purchase/subscription for $9.99 -- get $7). It only concerns to the sales of paid apps and in-app purchases. For subscriptions, this fee is equal to 30% only in the first paid year and then it decreases to 15%. We mean that Google will charge 15% of the transaction from each user you retained after 12 months of his or her paid subscription.
Amazon Appstore publishing cost
Quite a popular alternative app store that'll showcase your app to it's audience but bring the additional expense. Though, the pricing policy within this app store is simple if compared to the previous ones. Everything is free but Amazon charges 30% transaction fee for any purchase.
Of course, we can't call it extremely considerable expenses but still it's not a bad thought to write them down to your budget. Especially app store fees related to transactions.
App store fees by marketplaces
Some extra money on app publication isn't the main topic we wanted to discuss in this heading. The point is before getting to the app store your mobile application has to go through the approval process. This process can not only take some extra time but entail some extra app development costs.
Why? If your app doesn't correspond to app store's rules and requirements -- it won't be accepted. In turn, it may take some time until the app's code or design will be improved. Most IT service providers undertake to publish the application before handing over the project, so you are less likely to pay off the additional app development costs. However, if you hold your own team -- each hour of their work is an additional expense for you.
If you faced some difficulties with app store even before the release -- it's not the worst scenario. App stores change their requirements from time to time and your app can be deleted from there over time if not to keep it up-to-date. For instance, with the iOS 11 update, the App Store stopped showing in search the 32-bit apps which didn't upgrade it's architecture to 64-bit.
So, you should be ready for additional costs of maintaining an app to keep your app afloat.
2. Cloud data storage costs
That's another additional expense many people forget about. If your app implies storing and processing certain data (e.g. users' photos, videos) -- you need to consider the cost of data storage. As a rule, the monthly cloud storage fees increase as your app scales. For instance, Facebook pays about $1.5B annually to store the data of their users.
The most popular cloud storage service is Amazon S3. Amazon data storage cost you nothing at first. You can start working with it for free but as soon as your app requires 5 GB of storage, 15 GB of data transfer out, 20K get and 2K put requests -- you'll be asked to pay.
Amazon storage fees
However, that's not the only expense you'll be faced with since cloud storages ask to pay separately for various manipulation with data. For example, you should pay for requests, storage management, data transfer etc.
Amazon storage fees: Data transfer
You can get acquainted with the full list of costs on the related AWS page.
3. Software licenses costs
We mean licenses on the usage of SDKs and libraries. The majority of them are completely free and open source, while some are paid or their free versions are limited in functionality. In a nutshell, these are ready-made solutions which focus on solving specific tasks and can be customized to meet your project's needs. They allow developers to cut the time they need to implement certain features.
Let's say your app requires a flexible search so that users could find anything they need by name, location, and a couple of other parameters. You can ask your team or outsourcing company to build it on their own but it may appear to be time-consuming and take over 100h of development. Multiply this figure by $50-150 which is a developer salary per hour (depends heavily on a region) and you'll get the approximate cost of one single search feature. Or you can use the specialized solution, pay this software license cost, and decrease this number in several times. Anyway, you should consult with professionals first and they'll tell you which way looks better for your project.
So, this way you and your team are able to achieve the desired result with minimum additional expenses if any. Let's consider the paid versions of some popular libraries to figure out approximate expenses on their usage.
Additional costs of app development: Paid libraries and SDKs
All the solutions above have free versions and their paid ones are needed to meet more specific requirements.
Cost of IT services
As we mentioned, app development isn't the only IT service you should plan your budget for. Let's consider the other ones.
4. Cross-platform app development cost
Developer salary: $50-150/h depending on a region
We won't consider the prices on mobile development in this headline. We just want to stress that if you want your app to work on both iOS and Android platforms -- you should count your budget on the development of two apps. These are two separate processes which involve two teams of developers and respectively are estimated separately.
That's because Android and iOS apps run on different programming languages. One and the same app is literally built from scratch for each platform even if the requirements and scope of features are the same. So, consider cross
Generally, it's faster to build iOS apps than Android ones because of the platform's fragmentation and some other difficulties. Roughly saying, Android app may take up to 20% more time if compared to iOS.
Cross-platform app development cost
We talk about a native app for each platform, not about one code that works on both of them. At the moment it's quite hard to deliver products of high quality by using cross-platform programming languages.
5. Design costs
Designer salary: $25/h and up depending on a region
Here is the thing, the same as app development, UI/UX design cost depend on the project complexity. In other words, the more hours a designer needs to finish the project -- the more this stage will cost you.
Read our another post if you're curious about mobile app design processes and the cost to design an app
As a rule, the design takes from 40h up to 380h for simple and complex apps respectively, regardless of the platform. However, if you need an app for iOS and Android -- you need two different designs since these platforms use different design principles and languages. As a rule, it takes 50-80% less time to adapt the design for the second platform. But remember that if you need a dedicated app design for tablets or wearables -- it's a separate expense.
App design expenses
6. QA costs
QA engineer salary: $25/h and up depending on a region
It's worth noting that without proper testing you are at risk to get the final product of poor quality that will affect negatively on overall user experience. App's stability on different OS versions, various devices, and screen resolutions -- all these require testing. In Cleveroad we include services of QA engineers into the cost of app development.
7. App maintenance costs
Maintenance is needed to fix those issues and failures that appear over time or the ones that weren't found before the release. Except for these, it's needed to prepare your app for the next OS versions and provide it's stability. How much does it cost to maintain an app? According to statistics, costs of maintaining an app take up to 20% of app's total budget annually. So, if your app's costed you $100K, be ready to spend up to $20K on it's maintenance per year.
Again, each company has own rules concerning costs of maintaining a mobile app. For instance, in our company, we maintain the customer's app for free up to 30 days after release.
Does it still sound complicated and seem to be too expensive? Contact our managers, they'll estimate your app's idea and consult you concerning it's realization. Stop doubting and start acting, the consultation is free of charge!
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Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics
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