How much does it cost to make an app?

“How much?”

It’s the $64,000 dollar question for budget-cautious publishers.

The lowest I’ve ever paid for app development is £500; the most I’ve ever heard of is £250,000 for a top-end game.

Of course, you’ll have figured out for yourself that it all depends on the kind of app to be built, but even then it’s still possible to discern three categories of pricing: the rack rate, the overseas rate and the swap rate.

The Rack Rate
This being the cost to get a native-English-speaking programmer based in the UK or the USA to work full-time on your iPhone app. Most estimates I’ve seen put the current rack rate for iPhone development at about £100-£140 per hour.

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That’s right, your friendly neighbourhood app developer can gross £250k p.a. if they put themselves to it. It’s because the whole world wants an iPhone app. Everyone from the car manufacturers to the train operators to Brian Eno wants an app. Developers are used to these spikes in their earning power. A couple of years ago everyone wanted to hire developers who could programme in Ruby On Rails. There weren’t enough developers to go round and so their prices went way up. The same thing is happening with iPhone programmers now, but, as with Rails, the boom can’t last forever.

Indeed, I was stunned to see that books about programming the iPhone are topping the Nielsen computer book chart in the USA ahead of the usual bestsellers on Windows, Word and Excel,  hinting at a looming oversupply of programmers. Developer prices will come down in future.

But until prices do come down, the rack rate is £100-£140 per hour if you want to get your app made in the most painless manner possible. For everyone else, there’s the overseas rate.

The Overseas Rate
This being the cost to get your app built by programmers or agencies based in places like India, China or Eastern Europe. The cost varies widely but you can budget for between £15-£35 per hour. I’ve worked with programmers in Turkey and the Ukraine. On both occasions I was pleased with the results and very pleased with the prices, even if language issues sometimes made it painfully hard for buyer and seller to communicate. In outsourcing overseas, I repeatedly saw how an instruction that might be obvious to me can be ambiguous to someone at a desk thousands of miles away.

I’m talking my own book to say so, but if you’re thinking of building your app overseas then you really should consider using a UK-project manager who knows what you want and can take the strain on your behalf. Otherwise you’re going to spend a lot of time on the phone or IM with well-meaning people who say “No problem – I do it now”, when really they’re trying to say “Your instructions are unclear; I cannot proceed”.

If you’ve ever been put through to an Indian call centre you’ll know that the person on the other end of the phone is usually hard working and motivated but, just as often, its hard for you to understand them and vice versa. There is no getting round this problem except to throw a lot of time and patience at it. Just make sure it’s your project manager’s time and patience, not yours. You’ll end up with a lot less of both.

The Swap Rate
This being the cost to get your app built by someone who gives you a discount from the rack rate because they stand to benefit from having worked with you – you’re making a swap, in other words.

Swaps are more common than you might think. I’ve come across a few in a short space of time:

– The talented programmer in the UK who granted me a good price because I wanted to do something with Google Maps while he wanted to learn Google Maps
– The top-end programmers in London offering development at cost because they’re keen to show that they’ve worked with book publishers
– The developers who were happy to develop an app for  revenue share.

My point is that if you or your project manager has time to ferret around then you’re not doomed to paying the rack rate or shouting louder in English.

So much for hourly rates. How many hours will it take to build my app?

It’s impossible to say for certain.

This is where app development starts to resemble having the builders in to renovate your home. A builder can give you their best estimate but they can’t really know for sure until the floorboards come up and they can see the state of the wiring in your house. Sometimes a builder will eat the cost if a job proves to be harder than they first thought; other times they’ll ask for more money. So it goes with app development. A programmer can give you a time estimate but it is fairly meaningless until they’ve spent a lot of time on the job, by which time they’ll need paying anyway. You’ll always get a time estimate if you ask for one, but that’s largely because the programmer senses you won’t be happy until they’ve said something, anything. They can’t really know for sure until they break the job down into its constituent parts, which, to repeat, can take so long that they’ve effectively started the job anyway.

I used to think that anyone who could make it easy and predictable to buy building services would be a millionaire within weeks; I soon caught myself thinking the same thing about iPhone developers. I’d have been better off acknowledging that building work and app development work are inherently hard to predict.

If it helps, here’s how long it reportedly took to build some apps. The first two examples are mega-hits, so keep in mind that the durations quoted add to the hype of the iPhone rags-to-riches story. Journalists love to write about kids throwing together an app on Saturday and buying a Ferrari on Monday, but much of it is just a great story getting in the way of the facts. Common sense should tell you that good software is rarely simple to make or market.

Trism – “Six weeks, morning, noon and night outside of the day job”.

iSteam – “One week”

Wizzley Presto – “30 days”

Tea Time – “Three days”

Baby Tracker – “Over 100 hours”

As you can see it’s hard to discern development times merely from looking at other apps, because no two apps are alike. My advice to anyone looking to start app development is treat time estimates with a pinch of salt. You’re more likely to keep costs and lead times down by using a project manager to write a great technical spec and have them check in with your developer every day.

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