IoT App Development Costs: Full Analysis For 2022

IoT App Development Costs: Full Analysis For 2022

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Businesses today cannot function without embracing new technologies. The increasing use of smart devices presents a fantastic chance to bring your product or service to your target audience. These days, no enterprise can function successfully without a mobile app or IoT-ready devices. 

But the time it takes to get from having an idea for an app to releasing it is just one of the numerous factors affecting the total IoT development costs. We've broken out all the significant elements below to help you understand your IoT software development costs.

1. Understand The Needs Of Your IoT Solution Through Requirements Engineering 

Once you have settled on a direction for your app or software and double-checked your assumptions, you may move on to formalizing your production and engineering needs. More details on How to Create An IoT App: Comprehensive Guide.

This is important (at least conceptually) so that you may create the best Internet of Things project for your company, decide whether to build or buy and work with the most appropriate vendors and partners. 

1.1 Effective Questioning

You need to resolve operational concerns like:

⚈ What sources will the data come from?

⚈ Which metrics need to be tracked?

⚈ Which analyses will lead to tactical understanding?

⚈ Which business-wide systems require integration?

⚈ How do I know what to provide?

Remember that the actual value of your IoT solutions lies in the data your connected gadgets produce, which you can then use to derive actionable intelligence and push timely insights into your goods, processes, and operations to revamp your company completely.

1.2 Identifying Needs Regionally

The next thing to do is create the first draft and ask yourself and the team, "Do we have the technical knowledge to build this in-house?" for each part of the puzzle. Can we meet the needs of our customers as they change and technology advances?

It'd be helpful, for instance, to have an idea of the expected volume, structure, and retrieval speed of the data to be created. Which database and storage solution is needed, and whether or not it can be built atop your existing data infrastructure, will depend on the answer to this question.

1.3 Layers Of An IoT Solution    

Perhaps when you hear "Internet of Things" (IoT), the image of a "smart" device or sensor immediately pops into your head. However, five main layers must be considered when developing an IoT solution, each of which has its unique security consequences.

Hardware Layer    

From low-powered devices with limited functionality, like temperature monitors, to massive, high-powered equipment that collects, processes, and sends numerous sorts of data, like an autonomous car, every device is powered by IoT.

There are five main parts to any IoT device:


Information is gathered by a sensor and then displayed or acted upon by an indicator or actuator.


The "brains" of an Internet-connected gadget are its computational capabilities. Every IoT device needs some onboard computation to gather, store, and send information.


The edge, your core data center, or the cloud may serve as your data management site, but all IoT devices must send and receive data to and from that place.


The device's computing, sensors or actuators/indicators, and data transit will all be powered by this energy source.


An internet-of-things device's enclosure shields its inner workings from the elements. After all, many Internet-of-Things gadgets are made to keep people out of harmful conditions, such as high heat, water, or vibration levels.        

Communication Layer

Connecting your hardware to the IoT platform necessitates communication. This is a distinguishing feature of IoT devices (so-called middleware between hardware and application). Access may be achieved wirelessly or via Ethernet cable.

Cellular networks (LTE-M, NB-IoT, 3G, 5G), LANs (WiFi, Bluetooth), LPWANs (LoRaWAN, SigFox), and mesh protocols with limited range can all be distinguished (Zigbee, RFID). If you want to use an existing network for your Internet of Things solution, you should look into what is already out there. Perhaps a simple WiFi link will do the trick for you.

Costs associated with connectivity will vary based on the network you use and its pricing structure. For instance, the per-device connectivity cost in a narrowband cellular network is estimated at $6 to $12, while the corresponding figure for LoRaWAN is only $4 to $6.

Cloud Services    

When you're ready to move on to the next phase of developing your IoT solution, connecting to a cloud server is the next logical step. The cloud is there to back up all your Internet of Things gadgets and apps, and it's also where you'll find all your collected data. Using a third-party cloud server is more economical than constructing a web server from the ground up.

In addition, it makes sense to go with a Cloud Platform rather than just a cloud provider because of the additional features it may provide. 

An IoT app may be developed and deployed more quickly and with less effort using a cloud platform that facilitates communication between devices and applications and stores and processes data. Learn and compare different cloud models.

Software Application

The potential uses of the Internet of Things (IoT) are only constrained by the inventiveness and creativity of those who develop and implement them. Several usages include:

⚈ Tracking of assets in real-time

⚈ Operational data collection

⚈ Location monitoring

⚈ Machinery sensors

⚈ Monitoring consumer actions

⚈ Logistics planning for vehicles

A single application can serve as a vertical entrant in several IoT categories and horizontal marketplaces.        

Security Cross-Layer

Due to the complexity of modern threats, security measures in IT infrastructure are now considered essential. Security Layer presents significant difficulties in integrating IoT systems due to issues with data breaches, monitoring lousy software, and hacking.

Device Security

As far as IoT security is concerned, the gadgets themselves are the first line of defense. For IoT integration, most manufacturers install firmware and hardware according to strict security rules.

Among the most crucial steps are:

⚈ Protecting devices from harmful software via a secure boot mechanism,

⚈ Implementing endpoint security with cryptographic keys and Trusted Platform Module (TPM) chips

⚈ Using an additional physical layer to prevent device-level access

⚈ Maintaining a regular update schedule for security fixes

Cloud Security

The traditional server is being replaced by cloud computing for storing and transmitting data. Particularly for Internet of Things systems, ensuring the safety of their data is crucial. Multiple authentication methods and encryptions are safety mechanisms to prevent information leaks. 

Here, the verification of each new device is the backbone of the system, and as such, there must be stringent rules for managing the identities of these gadgets.

Connection Security

As an industry standard, TSL is advocated for usage in all IoT architectures for secure data transfer. The data being transferred across the IoT network must be entirely encrypted. Here, we use the integration of message protocols like AMQP, DDS, and MQTT to prevent unauthorized access to private data.

2. Factors That Influence IoT App Development Cost

Several variables can affect the final price tag of an app's creation, including the developer's level of expertise, the app's level of complexity, the availability of ready-made components, and more. Let's look at some of the major factors that affect the IoT cost of an app.    

2.1 Design & Features        

The functionality and design of an app have an impact on the entire development process. The IoT project cost will increase directly to the complexity of its design and features.

The app's starting fee will rise if premium features are added, such as third-party integration and push notifications.

Businesses can practically do anything they want by deploying apps for all mobile devices. The price tag for app creation is entirely dependent on your specific needs. The price ranges widely, from the hundreds to the millions of dollars.

Moreover, the complete procedure of making mobile apps is driven by the design of their user interfaces and their app layouts. The hourly rate of your smartphone app's development will rise in proportion to how intricate your idea is.

Standardized and platform-specific elements are easy to produce and comprise most of the app's basic architecture. Adding specialized parts is a good idea for making the whole process dynamic, but it increases the need for a data server and the associated expenditures.

2.2 Infrastructure

There are three main components to the IoT application's infrastructure, just as hardware. These factors add up to a hefty sum when developing a mobile app.


Your Internet of Things application will be utterly useless without a reliable and error-free network. When building an IoT app, it's crucial to prioritize safe connections between devices. Keep in mind that LPWAN and other forms of short-range wireless networking are inextricably linked to any useful application.


Undoubtedly, interfaces with external services have become an essential feature of mobile apps. When connecting IoT gadgets and external systems, the middleware pieces play a crucial role as the go-betweens. Third-party integrations are necessary if you want your IoT mobile and web apps to run smoothly.    

Cloud-Based Storage

Cloud-based systems are the best option when it comes to data protection. One of the wisest moves you can make is to put money into the Internet of Things (IoT) apps that run on the cloud.            

2.3 Size & Complexity    

The app's size and complexity also affect how much it will cost to create the IoT app. For instance, if you want to add more sophistication to your Internet of Things (IoT), it will take longer to construct, driving up the IoT app development cost.

Moreover, investing in IoT for intelligent home automation may be cheaper than creating an IoT app. Therefore, the more extensive and expensive the program, the greater its complexity.

2.4 Hardware    

Embedded software engineers also claim that in the mobile app industry, the hardware used to run the app influences the app's Internet of Things cost. Each of the many hardware phases involved in creating an Internet of Things app adds only a negligible amount to the final price tag.     

Below, you will find the four sections that make up the stage.

Stage 1 – App's Analysis

At this point, specialists from the company developing the IoT app had begun examining the breadth and depth of the app's functionality.    

Stage 2 – App's Modelling    

The next step is for the IoT app development and design team to build a model or infrastructure of the app to show to the client.

Stage 3 – App's Prototyping

Designers and developers must collaborate on a series of prototypes, or "sprints," before arriving at a final design for an Internet of Things application. This step raises the total price of making an IoT app by a small amount.

Stage 4 – App Testing

Last but not least, testing and upkeep of the application is a crucial phase. After all, documentation has been signed off by professionals and customers; testing is performed to ensure a flawless final product.

Remember that the IoT price of the various cooperation strategies is not the same. A software development team is extended and paid hourly using the team extension model. The total cost of making an app is factored in when doing it via end-to-end development.

A software development company can estimate your Internet of Things solution cost unless you already have in-house IT specialists. 

3. How To Determine An IoT Solution's Entire Cost?    

Creating a feature-limited Internet of Things (IoT) solution can be done for as little as $50,000. Adding features like payment system integration or custom sensors to your app's hardware can run you upwards of $70,000.

What we've learned at Indeema is that knowing how much money you'll need to put into development is one of the most crucial steps in creating a successful product. Here are two products we've created for customers and the associated Internet of Things (IoT) price.

3.1 Heating Oil Usage Monitoring Solution

Indeema developed a clever system to track the amount of heating oil used. The software uses technologies like Platform IO, the Arduino Framework, and the System-on-Chip to keep records of how much gas you've used and alert you when it's time to refuel. Such Internet of Things implementation would start at $120,000.

3.2 Air Quality Monitoring Solution

Our team of Internet of Things experts created a system for checking air quality at home or at work. Internet of Things technology is used by the system to measure the purity of each breath we take.

The UBox device cloud platform, along with the UBreez app, monitors indoor conditions, including temperature, humidity, pressure, carbon monoxide, and volatile organic compound concentrations, to ensure that they are always at a safe and productive level. The price tag for an equivalent internet of things app starts from $160,000.

4. IoT Solution Development Costs: What You Don't See    

This section focuses on the less obvious contributors to the expense of developing an IoT solution and how to avoid them.

4.1 Sizing Up

The scalability needs for Internet of Things systems are often neglected to keep costs down. However, after the tests, if the system is expanded from hundreds of gadgets to hundreds of thousands, and it must handle various sorts of data and jobs without sacrificing quality or speed, the costs can rise to unimaginably high levels.

That is why it is crucial to think about expansion from the beginning of the design process. Your system should be able to easily accommodate more users, features, and connected devices without sacrificing speed or reliability. 

4.2 Scope Shifts

Inadequate planning may necessitate redesigning and performing U-turns in the middle of development, and these actions will not go undetected in your invoice. These occurrences are frustrating for the customer and the development team, but unfortunately, they occur more often than they should. 

To stay clear of these traps, developers should stick to industry standards and begin their work with requirements elaboration and writing the SRS document.

The first step should always be Discovery, where your team should conduct workshops and interviews to learn about the project's needs, scope, and technological constraints. Discovery's primary objective is to establish mutual understanding with our clients to elicit a Software Requirements Specification, a comprehensive schedule for the project, and a cost estimate based on the scope of its features.

5. How to Cut Costs of IoT Development and Prevent Failure    

If you're trying to build an app on a tight budget, you're probably seeking advice on cutting expenses. Here are some suggestions based on studies that should help reduce your IoT development cost.

5.1 Create A Complete Set Of Project Requirements

Do you want to create a mobile app based on your original concept? Then you should team up with a mobile app development company to bring your idea to life after teaming up with an app development partner.

If you haven't thought through every aspect of the project in great detail, your development team will have to do some legwork and devise a plan. This phase of app creation entails studying the market. 

Tell the app development firm you've contracted with precisely what you need. This way, the time it takes to complete your project will decrease, and the workload for your app developers will reduce. 

If you want a well-functioning app for your mobile device, you should specify those features in great detail.

5.2 Reduce Bugs and Rework In Your App's Development

Request that your mobile app's development team perform parallel testing. Errors identified after your mobile app's development is complete can increase your development costs because your software will need to be redone.

The cost of IoT implementation and development is proportional to the number of time developers spend working on your project. Make sure that the company you hire to create your mobile app also tests it as it is being made.

5.3 Develop A Mobile Hybrid App

You might choose hybrid mobile application development if you need to design an app for both platforms but have a limited budget. An alternative to developing a native app is to use a hybrid app.

One of the best ways to reach more people is to create a hybrid mobile app. However, hybrid is not recommended if your program heavily interacts with the mobile device's hardware. 

A hybrid app is a good option if your software doesn't need to interact with hardware features. Also, you could reduce the overall budget for app creation without sacrificing functionality.

6. Comparison of Internet of Things Platforms

It is essential to evaluate the engineering needs of your IoT system and then select which components may be improved upon rather than starting from scratch. 

Modern-day solutions can provide a wide range of services, including storage, sophisticated analytics, device management, drivers, flexible modules, and source libraries that shorten the time needed for development and testing, as well as development environments with SDKs for building apps and services. 

Choosing the Internet of Things platform provider that provides the most features for your solution is a great stress reliever.

However, these are not the only advantages of "out-of-the-box" IoT solutions. You can reduce development time, increase security, simplify scaling, and shorten time to market by integrating one of the IoT platforms.

Selecting the top IoT Cloud Platform from the market's 426 available options is no easy task. Take note of the features and, of course, the selling price.

7. Challenges Of IoT Applications Development    

For the efficient creation of IoT software, you need to overcome the challenges of IoT application development and devise a meticulous strategy for every problem.

7.1 High Initial Investment Cost    

Several "bite-size" IoT implementations with clearly defined milestones and manageable budgets are recommended to control the overall IoT app development cost. We recommend that our clients take baby steps at the outset, invest in rollout phases later, and use public infrastructure and software-as-a-service to cut costs.

7.2 Security Breaches    

The Internet of Things is insecure. There are numerous interconnected devices in this technology. Because of this, hackers can try to breach various systems. 

As a result, this presents a significant obstacle to creating IoT applications. If the devices on the network are not thoroughly inspected for intrusion, the entire infrastructure comes in danger.

About 52 million data breaches affected internet users worldwide in the second quarter of 2022.

Developers working on IoT projects face a massive problem in addressing the growing threat posed by cyber assaults. How much money a firm is willing to put into security professionals at the idea stage determines how safe its products will be.

7.3 Uncertainty in IoT Standards

There are numerous IoT standards under development, but the industry suffers from a severe absence of a de facto standard. There's nothing to do but wait for now. 

Several organizations, including IEEE and The Open Connectivity Foundation, strive to standardize an IoT language, making it easier for disparate systems to communicate and share data.        

7.4 An Appropriate Network of Communications in Every Region    

As appealing as it may be to use the cellular gateway to link IoT devices, not all users will have optimal phone coverage in every location. 

To address this, you'll need to set up some sort of infrastructure, which might be costly in and of itself. Therefore, LTE-NB and LTE-M are viable alternatives since they leverage existing cell towers to provide extensive coverage.

7.5 Post-Launch and Maintenance            

Creating an Internet of Things app isn't finished till it's been tested and released. One of the difficulties of creating an IoT app is providing post-production and maintenance assistance. 

Keeping the app up-to-date with the most recent features and services is essential for being relevant in the ever-changing world of technology. We're aware that the company you go with will determine the quality of service you receive after launch.

One way to solve this problem is to work with an established business that can supply you with the most effective and reasonably priced solutions.


Creating apps for Internet-connected devices is all the rage in today's high-tech world. There is a significant need for IoT-based mobile applications across all industries. These clever technological aids simplify, ease, and soothe the user's life.

Many businesses rely on mobile systems or applications powered by the Internet of Things. Apps built for the Internet of Things are being adopted for various industries, including manufacturing, healthcare, intelligent home automation, education, and security.

After completing your research on the IoT app development cost, the next step is implementing your own IoT solution. Get the ball rolling on your Internet of Things app development project so your audience can sample the resulting digital delights.

Related: IoT Solution Anatomy: A Deep Dive into Remote IoT Technology

Yaroslav Rybii

Written by

Yaroslav Rybii

COO at Indeema Software

In the information technology industry, I have more than ten years of executive leadership experience. Since 2011, I've worked with established companies and startups all over the world to provide full-cycle development for over 100 projects, primarily in the United States, Germany, Switzerland, Canada, the United Arab Emirates, and Ukraine.