IoT App Development Cost: A Case Study-Based Roadmap

The IoT project cost has always been quite tricky to accurate estimate due to the complexity of delivering a connected solution through Internet of Things implementations. It can involve many different stages within a typical software development cycle like researching connection protocols or establishing Bluetooth Low Energy (BLE) or WiFi connectivity. Each of these “extra” stages adds up to the overall project costs and may be not very clear when you’re just beginning the IoT integration.

However, at the highest level, we can break down the IoT development cost structure for IoT integrations into the following categories:

• Production costs. They consist of the finances required to create IoT hardware, such as modules. Both hardware and software integration and factory costs are included in this category.
• Development costs. These are the most interesting ones for us. They include aspects that are vital for solution delivery, such as fees for custom IoT development or researching data protocols like BLE integrations.
• Operating costs. These costs appear when the IoT solution starts to function. For example, finances spent on software licenses, wireless communication protocols, and establishing cloud hosting are standing as 'operating'.

Based on this, an IoT cost estimate for app development can range from $28,450 to $41,450. Since our team specializes in IoT mobile app development, in this article we will focus on IoT app development cost in particular.

We at Stormotion create Internet of Things software with the amazing React Native framework. It gives us an opportunity to deliver products for several platforms (iOS, Android) at the same time lowering Time-to-Market and expenses. This level of efficiency we can reach as React Native allows us to reuse different pieces of code for those other platforms.

To manage IoT development costs effectively, we recommend starting by launching your product on the platform most preferred by your customers. Later on, you may launch the solution on the other platform, if it becomes necessary.

In turn, React Native makes the IoT app development process for both mobile platforms less complicated. Thus, you don’t have to seek assistance from different experts to integrate a new OS, when it all can be done by one 😉

Moreover, the adoption of React Native allows reusing some parts of the mobile code for web platforms, optimizing your business model by reducing costs and making it an efficient choice for developing smart home automation apps. Thus, if you don’t plan on focusing solely on one platform, we’d recommend you consider this framework as the way to cut IoT application development costs without the decrease in quality.

Software Features

As the quality and quantity of your software’s features considerably impact the IoT software development cost, we recommend building a clear vision of what is needed and what is desired. In other words, think of starting with an MVP — Minimum Viable Product.

Prioritize the functionalities, such as real-time analytics, and features you'd like to have in your project by dividing them into the vital ones and the ones that aren’t so necessary at the first stage. This will help you to understand how much your project’s core costs and what the cost of further development stages is. This approach will also help you determine how much it costs to build an IoT application by cutting off non-essential features at the start, decreasing the overall project cost.

📝 Start with essential features and introduce advanced functionality later. For instance, prioritize real-time monitoring over predictive maintenance and analytics for an MVP.

UI/UX interfaces

In our opinion, one of the most valuable aspects of IoT software app design is user-friendliness, especially in the front end to ensure intuitive navigation. The easier it’s to use the app — the better user engagement and retention rate you may expect. The complexity of your project’s design can significantly influence the cost of IoT mobile application development, especially in specific fields like smart agriculture IoT, where industrial designers often play a key role. In the IoT industry, we recommend sticking to non-complex and intuitive app design decisions in order not to overload the user's experience along with the project’s budget.

We’d like to list several inner aspects that affect IoT product development costs and speed up the delivery at the design stages:

• General practices. It’s quite common to observe the tendencies and decisions that are used among the companies of your segment. If there’s a common design decision found in different companion apps, there’s no need to complicate the development by trying to invent something extraordinary. The main advice if you prioritize lower costs and faster development — stick with simplicity.

• Responsive app design. On one hand, it’s a significant challenge for designers to predict and adapt your project’s interface to every possible smart appliance, however, it may create excessive spending that isn’t so essential from the start. Our advice is to determine several main devices at the design stage and focus on development, as you can always adapt to new ones in the future when it becomes necessary.

• Existing libraries/decisions. We recommend implementing more already existing libraries and features that perform essential functions to lower your expenditures. If your goal is to make a good product without spending tremendous amounts of money — don’t overlook taking existing design solutions and prototyping tools into consideration. It’s always cheaper to give up a few potential features than to design everything from scratch.

As you have already realized, user-friendliness and design complexity are crucial for IoT apps, especially for industries like smart agriculture or healthcare, which often demand custom solutions.

📝 Focus on a responsive design for only a few core devices initially. Adapting to additional devices can be scheduled for future iterations.

Development Practices and Tools

The choice of development tools and practices as an IoT development strategy largely determines the overall IoT development cost and time. This indicates that utilizing effective methods and resources, including including secure communication protocols and robust encryption protocols, can lead to tremendous time, space, and cost savings for organizations.

Using pre-built libraries speeds up standard operations in the backend, allowing you to synchronize the cloud in real-time, “connect” messaging protocols (for example, the MQ Telemetry Transport protocol), or integrate embedded software for secure data handling. This can reduce costs by 15–20% while ensuring data privacy and secure operations. For example, using customized connectivity solutions from scratch ensures proper handling of sensitive data using the AWS IoT SDK to connect devices is more cost-effective than developing other connectivity solutions from scratch.

Maintenance and Scaling

For specific applications such as radiation monitoring devices, maintenance includes updates, bug fixes, adaptation to operating system changes, automating processes, and other ongoing costs to work with future devices. Annual maintenance costs average about 15-25% of the initial IoT development cost. For example, the cost of developing an IoT application is more than $100,000, and the company must allocate between $15,000 and $25,000 annually to maintain it.

Any IoT solution may require a new level of scaling when the number of users increases or new devices are added or when managing multiple devices. Including new platforms - for example, a web version of an existing mobile application - costs between $10,000 and $50,000. Supporting new IoT devices in this case costs from $5,000 to $20,000 per device, depending on the integration required.

Integration with IoT Ecosystem

IoT device integration and ecosystem compatibility are critical as Internet of Things (IoT) solutions do not exist in isolation, as IoT solutions can and often do require seamless integration with other IoT solutions. Interoperability with existing IoT devices, systems, and environments is paramount, especially when meeting industry-specific standards, but comes with costs associated with complexity.

For a better understanding of what a Project Discovery Stage is, feel free to click the link down below and acquaint yourself with how it’s usually done.

Start off your development with an MVP

The most common mistake, that usually leads to increased cost to develop, comes from the desire to deliver the product at its best as soon as possible. However, such desires often become an issue that makes development longer and even more complicated. We recommend starting off with the concept of creating an MVP that can be easily modified and tested, before proceeding to the final product creation.

Building an MVP first helps cut costs by an estimated 35–50% compared to developing the full product right away.

Use this approach when:

• You are helping to shape consumer attitudes towards new IoT products such as a health tracker.
• You need diversity in the market to reduce time to market and gain an edge over competitors.

Throughout the project’s life cycle, especially in home automation, there’s a place for various adjustments that are much cheaper and faster to implement in MVP than to remake a full-fledged software. Not to mention extra costs spent on handling issues and challenges that may appear through the development. Exactly the MVP stage allows you not to start over the development, thus, letting you avoid unnecessary expenditures and gather more feedback.

For e-scooter application developers, launching with an MVP helps validate core features like scooter tracking, ride reservations, and payment integration to align better with consumers' expectations.

Provide Early Quality Assurance

The most effective strategy for significantly reducing IoT software development costs is to implement QA (Quality Assurance) early in the MVP (Minimum Viable Product) stage, especially during the testing of IoT prototypes. Early QA can reduce bug-fixing costs by up to 50% and cut project timelines by 15–25%.

The later you provide Quality Assurance for your product, the bigger risks are to encounter bugs and unexpected challenges at the further development stages. For example, identifying a connectivity issue in a prototype phase may cost $1,000 to resolve, but the same issue in production could cost upwards of $10,000.

On the contrary, early QA allows to foresee and prevent a great number of such issues that could drastically slow progress and hit with excessive financial expenditures.

Use this approach when:

• When building applications with significant real-time functionality (e.g., factory automation applications).
• When building applications that connect multiple IoT devices that require high interoperability.

Initial Cross-Platform Development

As we’ve already mentioned in previous sections, it’s crucial to understand what platforms you are targeting first. Basically, the more platforms you need to cover, the higher IoT application development costs you should expect. However, in case you’ve already determined beforehand that you’re going for more than one of them — there’s a way to reduce the costs.

In fact, considering initial cross-platform development, guided by skilled engineers, allows you not only to reduce the IoT platform development cost but also significantly lower the costs to maintain and modify software for your project, highlighting the benefits of a unified development approach. Using technologies like React Native can reduce development time by 30–40% and maintenance costs by up to 50%.

Use cross-platform development when:

• Your project needs to target both iPhone and Android, and its features need to be nearly equivalent.
• Due to financial constraints, you can only use low-cost solutions and still retain all significant features.

As it comes from the table above, the approximate IoT mobile app development time (core functionality, to be more specific) varies from 569 to 829 hours. Given an average charge rate of $40-60 per hour, we managed to estimate the highest possible costs for every development stage. Keep in mind that our estimates are based on the experience we had working among the Central and Eastern European companies. However, the rates for delivering a product of the same quality will probably be higher if your development partner is from Western European and North American regions.

Generally, it depends on the number of desired features and the complexity of a project. However, regardless of the complexity, we at Stormotion love being partners in crime for developing IoT-based mobile apps, even when certain features make the process more expensive, as it’s always a unique and unforgettable experience.

There is another thing we may recommend from our expertise. To save your time and budget, always send your custom device to the team you hire for IoT application development, especially if it involves hardware experts for module optimization. We at Stromotion worked on creating a companion app for an IoT system when the developer didn’t manage to deliver an IoT module to our office. As a result, our team had to spend more than 50 extra hours on the development, establishing the best connectivity level without the device being physically present. Thus, extra time wasted on the development also turned into excessive expenditures according to our charge rates from that period.

On the other hand, our latest project Norsk Guardian is an example of IoT application development, when we had the device in our office before the project started. Norsk Lithium develops batteries for outdoor activities such as open-water fishing, ice fishing, and camping, with a focus on extended battery life. They also are of a great use as accumulators and portable chargers for your accessoires. 7 people from Stormotion Team were involved and managed to deliver a full-fledged IoT app in about 30 weeks of work.