Reality check – state of mobile/smartphone market
Mobile is new, and very few people/companies are rolling out smartphone mobile app projects right now. Despite what you might see in Apple commercials or read in the blogosphere, not too many people are in mobile/smartphone space, and very few ISVs are actually making money from mobile/smartphone initiatives. All the money in the new mobile/smartphone space is going to hardware makers, and telcos, not ISVs. There are 100s of thousands of apps on the iPhone app store. Sure. But most of these apps are jokes, nothing more than glorified RSS readers, or dumbed down web views. This is just the state of this smartphone market right now. Hardware makers and telcos are so desperate to show off how viable their platforms are, they brag about how many useless apps they have in their catalogs, and don’t really talk about how few people actually use these apps. When they do get used, it tends to be for just a few seconds for the lifetime of that app on that smartphone by that user. They don’t talk about how much it costs to build these Android apps, or why people should be interested in building these BlackBerry apps, or not. So what does real Android app development pricing look like? What is the cost to hire developers to make Android and BlackBerry apps? How much should you expect to pay to develop/build an Android or BlackBerry app?
It is important to note that just because an app has been built, it does not mean that anyone will use it, or even know it exists. The current app stores (Android, BlackBerry, Apple) are really bad about discoverability of apps. They are all about promoting themselves, and they lose sight of the fact that the point of the store is to promote and sell apps (in the store), and not just promote the store itself. But this is not surprising, considering that the motivation behind the creation of these stores is for hardware manufacturers to give consumers one more reason to buy their products, because there are a plethora of apps in their respective stores. It has nothing to do with the quality of the apps or relevance to the user. It does not seem to matter that no sizeable number of users actually care about most of the apps, or are using them, much less paying for them. It was all started by Apple (a consumer electronics/hardware company), as a marketing tactic to sell more iPhones, and then BlackBerry jumped on the bandwagon, etc. This is the definition of hype and marketing bull, and this should not come as a surprise at all.
Not to mention that setting the price of an app to 99 cents does wonders to kill the ecosystem of ISVs that may have had a chance to make money from these stores. Smartphone mobile is not commodity, it is novelty. Novelty costs money. Novelty also has low marketshare, by it’s definition of being novelty, so you can’t count on volume to make money. To give you some perspective, feature phone marketshare is measured in Billions of units, smartphones are in 10’s of millions. By making such a ridiculously low price point the norm for smartphone apps, it eliminates serious companies from getting in the fray. It is not worth the investment of 100’s of thousands of dollars if the payoff is measured in the 100’s of dollars. This is why hobbyists are mostly building apps, and there are few serious businesses that are in the market right now.
But, it costs 99 cents to buy…
Having said all this, how much should mobile smartphone software development cost? It is important not only to have a reality check at the state of the mobile/smartphone space, but also to get real about how much all of this might actually cost if someone actually gets serious about implementing a mobile project to grow their business, or start a new one. Hype is not a good starting point for anything except getting more money out of blind/greedy investors . Let’s start by saying that just because an app is available for purchase for 99 cents that it does not cost 99 cents to make, it costs a lot more to make. No duh, right? You might be surprised by this “duh” sentence, but you would be more surprised how many people don’t understand this. Having said this, how much should it cost?
Before I can answer this question, it is important to define what a “mobile app” is, or better yet, define certain categories that most (if not all) smartphone mobile app development would fall under. There is very little information out there about this categorization or cost formula, and I am about to change this. Here are some broad guidelines for different types of mobile app development, and it is made more complicated by the fact that there are multiple mobile hardware and software platforms, and a good bit of divergence in each platform.
Here are some average costs for building smartphone apps that are varying in degrees of complexity:
Cost of Android app development
Cost of BlackBerry app development
Cost of iPhone app development
Multiplatform and Web
If an application has to run on multiple BlackBerry OSes, Android, iPhone, and web, then the cost of building the apps and services goes up by about 20-50% depending on the exact requirements. Multiplatform interactions are not cheap. Just because GMail is free and works on all mobile devices, and web browsers, does NOT mean that it does not cost Google anything to make!
ScreamingToaster delivers HIGH value & LOW cost for “high functioning” multiplatform mobile outsourcing. We are extremely cost competitive for high functioning multiplatform mobile initiatives. We can bring down the initial cost of implementation by up to 50%, and the cost of implementing change and supporting multiple platforms by 70% (which is the lion’s share of the cost incurred during the lifecycle of a mobile initiative).
Cost of mobile web view development
Mobile web views, also referred to as “mobile web apps” are not really (native) mobile apps at all, they are tiny webpages displayed in the browser (dumbed down and not engaging). They are usually made by web developers or graphic designers, and consequently are very inexpensive when compared to native Android, BlackBerry, and iPhone apps. They do very little, and are made by taking an existing website and making it smaller, and simpler (which is not necessarily a good thing). They can’t utilize 95% of what a smartphone offers, such as: GPS integration, in-app payments or ads, push notifications, cool UI elements, effective/powerful data visualization, resilience from network outages & interruptions, using local content caching, or integrating with the smartphone’s native apps. Eg: Typing in a zip code in a tiny webpage that you can barely see, is not GPS integration! Mobile web views are suited only for very simplistic static content such as news articles, blog posts, and Help/FAQ pages. Click here to learn more about mobile web views.
Here are some average costs for building web views that are varying in degrees of complexity:
Expensive and difficult
The price ranges vary depending on exact requirements. Let’s dispel the myth that mobile development is ‘EASY’, beginner-friendly, and suited for ‘web developers’. This is marketing crap and media hype. Mobile development is VERY difficult – it’s much more difficult and more complicated than web or server app development. If you have experience in web or server app development, this experience will NOT help you with mobile. Sample code from open source projects, tutorials, and books will not come close to getting your team ready for the minefield that is mobile development, deployment, and testing. The code your developers have copied and pasted might simply stop working on a real device (even though it compiles and runs in their simulator) due to a carrier limitation, device limitation, or user configuration choice.
Testing is such a huge cost center for mobile smartphone development, since simulators and API docs are marginally useful. They do not give you any idea what really happens to software running on a real device, on a real network. The experience of working on diverse hardware, software, and carriers all over the world, are critical in ensuring the success of your mobile project. If your mobile app works perfectly in the simulator, this means nothing at all, and you have just gotten started (not finished).
Mobile is a whole different ballgame full of hardware capability divergence, screen size & form factor divergence, carrier limitations, DPI independence issues, and it all gets increasingly more difficult when you get into cloud-connected multiplatform-mobile. We educate all our consulting clients on these topics when they get started, and the reaction is the same from most of them – one of disbelief. I have been in this space since 1997, which is way longer than just about anyone I have met. I have seen this space evolve, and it has come a long way, but it’s rules are different than those of web and desktop and server. And people who treat it the same always think smartphone mobile development is easy and inexpensive, and just like web development. These are typically the people who think that a mobile project will cost $5000 or less to implement!
There are 3 groups of people in the world, when it comes to funding mobile smartphone application development:
My claim is simple. All three groups of people above simply have it wrong. It is NOT ok to charge $250K minimum for any kind of mobile development, regardless of requirements. It is also NOT ok to expect that smartphone mobile applications will cost less than $10K to make. And it is also NOT ok to pay $10-20K for web views that are for the most part, existing JS + HTML projects that use a different CSS stylesheet.
ScreamingToaster delivers HIGH value & LOW cost for “high functioning” multiplatform mobile outsourcing. We are extremely cost competitive for high functioning multiplatform mobile initiatives. We are up to 50% less expensive @ project inception-time, and up to 70% less expensive @ project change-time.
My hope is that this article will help people get a more realistic sense of pricing for their next mobile/smartphone project and initiative. Smartphones are new. This space is constantly evolving. It is always expensive to create novelty. Smartphones are not even close to being a commodity yet, so don’t make the mistake of applying commodity pricing models to it.
Why I’m qualified to write this white paper
I’ve got over 13 years experience in the mobile/wireless sector, working on core technologies around delivering user experiences on mobile devices for the consumer and enterprise products/services. I’ve been involved in the creation of app servers and platforms dedicated to mobile app and service development, along with provisioning/deployment of apps to various devices (Palm, Blackberry, WinMo, J2ME, Android, etc) over the years. Here is a summary of my past experience:
And my work hasn’t been constrained to the confines of an R&D lab. In the late 90’s and early 2000’s, when mobile infrastructure was not what it is today, I rolled out many daring & innovative mobile deployments. Today, Android represents the holy grail of what I was doing. Back then, it was not possible to get a mobile operator to do anything differently, and today Verizon offers unlimited wireless data plan. My, how times have changed for the better. The times might have changed, but there are still many old truths/constraints that still hold true and apply to all things mobile.
I launched my second company, ScreamingToaster, in 2006 and I now run a successful Consulting practice, train developers on how to make Android, BlackBerry, and cloud connected mobile, web and desktop apps. I have launched 2 successful media sites, and I even make (and sell) my connected digital lifestyle experiences.
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