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How Much Does it Cost to Make Your First iPhone App? [3 Case Studies]

by Steve Scott | Join Him On Facebook

The Costs of Building Your First iPhone App

After the last income report, I had a few people ask about my approach to making iPhone apps.

Specifically some wondered how much the whole thing costs.

Surprisingly you don’t need thousands of dollars to build your first app.  My advice is to focus on something simple which only costs a few hundred dollars.

In today’s post, I’ll detail three different case studies of how much I’ve spent (or almost spent) on my budding app empire.

Announcing My First Two Apps…

My first two apps are very basic in design and functionality {I’ll explain why in a bit}:

Basically these are two free entertainment apps used to amuse the user (or annoy their friends).  The reason I chose this idea was “sound effect apps” are easy to build.  Plus they get a lot of downloads.

Shameless Plug: Please take a few minutes to download these apps and leave a review.  I’d appreciate any positive feedback that you can give.  Ultimately this will help me further understand the entire app building process.

Anyway…

Many people have the wrong idea about mobile app development.  They think one app can cost thousands of dollars.  Yes, you could spend that much money.  But that’s not a good beginner strategy because you’re depending too much on the success of a single product.

Remember you’re not trying to build the next Angry Birds or DragonVale.  Instead your first few apps are about creating a network of users.  Every future app will expand this network and help you reach a broader audience – Making you more money in the long term.

My app strategy is to crank out LOTS of entertainment apps.  They’ll be simple to design and simple to program.  The best part?  They don’t cost a lot to get started.

Here are three case studies that details my first experiences with the app building process…

Case Study #1: Dart Your Ex

Dart Your ExThis section could also be called: “How Steve Almost Wasted Thousands of Dollars.”

My first idea was an entertainment app where users upload a picture of their ex and throw virtual darts at the image.  I called it: “Dart Your Ex.”

Dart Your Ex was designed to be amusing.  Most people have serious anger towards their ex after a break up or divorce.  So they’d get to upload an image, throw darts at it, and then post the photo to their Facebook or Twitter account.

In addition, the app would play random audio as they throw darts.  Basically they would hear a recording of the classic break up lines that we all hate.  Like: “I hope we could still be friends” or “I’m just not ready for a commitment right now.”

I spent a lot of time and money designing this app:

I thought Dart Your Ex was going to be a home run.  So my expectations were high when I posted a project for a programmer on Elance.com and Odesk.com.

The result?

The lowest bids were around $2000.  Some were over $4000.  Plus most of the programmers said the project would take months to complete.

Now, I’m not against spending money to make money.  But I quickly realized that this ONE app would blow my entire budget.  If it failed, then there wouldn’t anything left to invest in another app design.

That’s why I decided to scrap the Dart Your Ex app idea.

Yes, I already shelled out $100.05.  But it was money well-spent because it taught me the importance of designing simple apps.

Case Study #2: Funny Sound Effects Library

Funny Sound Effects LibraryI went back to research mode after the failure of the Dart Your Ex app.  I discovered that sound effect apps are something that gets a decent amount of downloads.  More importantly – They’re easy to make!

My vision was simple.  I’d offer free apps which play amusing audio.  These would make money through banner ads and Interstitials (these are kind of like pop-up ads.)

The first app is called: Funny Sound Effects Library.  It plays 42 different sounds designed to amuse and entertain people.

Surprisingly, this app didn’t cost that much to develop:

  • iStockPhoto image: $19.00
  • Graphic design: $77.50
  • App programming and uploading: $777.77
  • Total: $874.27

$874.27 isn’t that much to pay for a quality app – Especially since I’m confident it’s better than 90% of what’s currently in the ‘sound effects marketplace.’

With that said, I also made a bunch of rookie mistakes that increased my overall costs.  Fortunately these were fixed for the next app…

Case Study #3: Siren Sound Effects Maker

Siren Sound Effects MakerHiring a programmer for the Funny Sound Effects Library app was a challenge.  There were many excellent candidates and I didn’t know who to pick.  It came down to two people – Programmer A and Programmer B.

Ultimately I picked Programmer A.  But I also, wanted to work with Programmer B because he quoted me a great price for my app design.  So I quickly threw together another app idea and had him concurrently build my 2nd app.

Again, I went with simplicity for the functionality and design.  I saw that lots of people were downloading “siren effects” apps.  So I decided to develop my own.  I call it: Siren Sound Effects Maker.

  • iStockPhoto image: $19.00
  • Graphic design: $34
  • App programming and uploading: $350
  • Total: $403.00

As you can see, the second app cost half as much as the first.  The interesting thing?  This app currently gets three times the number of downloads as my first one.  This shows there is little correlation between how much an app costs versus how much it gets downloaded.  It all comes down to finding what people want and building something that matches this need.

Putting it All Together…

There are a few additional costs you’ll incur with an app business.

First you need an LLC that provides full legal protection.  I spent $350 with Incorporate.com to create my new company: Appdictive Media LLC.

Also, you’ll need an app developer account.  This costs another $99.

So let’s add everything together:

  • LLC Formation: $350
  • App Developer Account: $99
  • Dart Your Ex (Failure): $100.05
  • Funny Sound Effects Library: $874.27
  • Siren Sound Effects Maker: $403.00
  • Total: $1826.32

I’ll admit it…  $1826.32 is a helluva lot of money.  But I’d consider it a small amount to pay to build a solid business that will (hopefully) make me money for years to come.

Also, I made a number of expensive mistakes.  I’m pretty confident that my future app ideas will cost less to develop.  And I’ve learned that the more apps you put into the marketplace – The more you’ll increase your chances of future success.

It’s not that hard to find app ideas that only cost a few hundred dollars.  All you have to do is find what’s currently working and keep the functionality at a bare minimum.

Show Me the Money?

Now you’re probably wondering: “How much money have you made?”

Honestly, my app empire hasn’t been very profitable so far.  I’ve learned a lot about this process which will ultimately translate into long-term income.  But there’s not a lot to show so far.

In my third income report I’ll detail what I’ve made with my apps.  Plus, I’ll describe what I’m doing to drastically improve my monetization strategy.  So stay tuned for more details.

My Question for YOU

Do you want to learn more about mobile app development?

This topic is different from the normal “authority affiliate marketing” content on this blog.  I know some people are interested in this income strategy and some aren’t.

I could easily write follow-up posts that talk about:

  • Different ways to generate mobile app ideas
  • How to make money with mobile apps
  • The right way to hire quality designers and programmers
  • How to quickly (and cheaply) build a catalog of mobile apps

There’s a lot more I can talk about.  The problem is that any time I spend on this subject will reduce the number of articles where I detail my authority affiliate marketing strategies.  (Which is the content that most people seem to like.)

I’m leaving things up to YOU.  Below is a poll with two basic options.  Just answer with your response and let me know your thoughts on iPhone app development.

Should I Do More Posts About iPhone App Development?

View Results

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Thanks for taking the time to respond to this poll…

…And please let me know if you have any questions!

Take Action. Get Results.




P.S. Struggling with your Kindle books? Don't know how to get started on Amazon? Looking to generate an additional stream of income?

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{ 33 comments… read them below or add one }

Thomas @ Mobile App Tycoon

Awesome post Steve – love reading case studies of specific apps and why they either failed or succeeded. You’re right though – many people get turned off from the app business because they think it will cost tens of thousands of dollars to get into, when in reality you can get started for relatively cheap.

Thomas

Reply

Steve Scott

Thomas – Definitely. You don’t have to go out and break the bank to get an app out there. In fact, that’s a horrible strategy when you’re first getting started.

I meant to ask you… How is your app business coming along?

Reply

Jacko

The majority of apps I see these days shouldn’t even be apps at all. Actually they are just screen optimized websites. If you can get your content across with a mobile template then do you really need an App?

I believe its best to get an app when you are taking advantage of device hardware these are the only apps worth using anyway.

Reply

Steve Scott

Jacko – Yes, some are not that fancy. But there is STRONG evidence that everything is going to go mobile in the next few years. For all we know, PCs and desktops will become outdated devices by the next decade.

I think ultimately it’s important for any online entrepreneur to get involved with this technology.

Reply

Marcin

I was one of the guys who contacted you on Fb to ask some questions, so you know my answer – write about apps whenever you can. This market is super exciting. I need to start working on my first apps so I can finish them before Christmas = insane downloads.
I’m really curious about your initial earnings, can’t wait to see next Income Report.
BTW: You can bring apps to the App Store as a individual, there’s no need to form LLC as far as I know.

Reply

Steve Scott

Hey Marcin.

Sorry if I missed your Facebook comment. I’ve had very little time to do social networking while on this seven week trip. Definitely comment here or drop me an email if you have specific questions.

Like I said, the earnings are NOT much right now. But I’m starting to figure out what to do to make them earn a lot more. I’ll definitely cover both in the next income report.

Yes, you can do apps as an individual. But I’m all about giving yourself the maximum protection under the law. You could easily have a crazy person sue you for no reason and take away everything you’ve got. Not a pretty thought if you ask me.

Reply

Marcin

Actually it was a private msg and you replied to me, so no worries ;)

Maybe I’m just too easy going, because I’d never thought of sb sueing me. But you are right, there are plenty of crazy people out there, especially when it goes about money…Recently, Benny Hsu from Get Busy Living Blog was accused of stealing an app design (which IMHO is totally differenty by the way) by one of those freaks.

You should have a look at RevMob, it seems to work very well for appreneurs right now. Carter from Blue Cloud Solutions and Trey Smith posted about it on their blogs, so you’re probably familiar with it!

Good luck :)

Reply

M Scott (CRM Guy)

I would think for the relative low cost of creating one, forming an LLC if you are going to sell any kind of product is a “must do”!

Reply

Steve Scott

Definitely agree with you on that one!

Reply

Steve Scott

Yes, lots of crazies out there! I’ve had my fair share of *interesting* encounters.

RevMob is something I’m implementing. I’m also working on a premium version which will be my primary source of revenue.

Reply

Christina Walker

Very interesting idea. I voted no in the poll because overall I would rather read more affiliate marketing stuff, but I would be interested in occasionally learning more about building apps. Especially coming up with ideas. That’s always the hardest part.

Reply

Steve Scott

Christina- Thanks for your honest feedback. It looks like most people want this content; but I also don’t want to turn this into a “app building” blog…so I’ll keep it around one post a month.

Reply

Carter

Hey Steve,

Glad to see you making moves into mobile. I think you’re right on with the start simple, grow smart approach. I’m finding lots of ways to build apps at low costs including licensing source codes all the way to buying apps straight up.

If you or anyone is interested in my post on what you wrote about, you can check it out here:

http://www.bluecloudsolutions.com/blog/cost-develop-app/

Also, you might want to have your developer check your chartboost more games SDK – the plants vs zombies works but your cross sell crashes the app. I’m using a 4S with iOS 5.1. Might just be something on the dashboard side with the campaign setup.

Kick some ass!

Carter
Bluecloud

Reply

Steve Scott

Hey Carter.

Good resource. Thanks for posting this.

Thanks for the heads up on the “more apps” page. I am having someone edit these; but I’m waiting till my premium app has been designed. As you know, it can get expensive having someone make constant tweaks to an existing app.

Reply

Geoff

Hey Steve, I’m curious, why did you decide to create an LLC for this (I’m assuming you don’t have one for any of your affiliate sites). Is it because people are more likely to sue if something breaks while using your software…versus affiliate programs where there’s not much to sue about?

I’m actually spec-ing out building a premium WordPress plugin and was considering whether the LLC step was worth it for me too.

Reply

Steve Scott

Hey Geoff. I’m a big proponent of having an LLC for every online business you own. That way, one aspect of your life is protected in case of a lawsuit. My advice is to always do your best to set up some sort of legal protection.

Reply

Geoff

Good tip Steve, I should jump on that. Do you lump any of your businesses into the same LLC or do you try to setup one per site (or something like that)?

Reply

Jens P. Berget

Hi Steve,

Keep writing posts about developing and marketing iPhone apps. It was very surprising to read how cheap it was to actually make them. I have just published my first Kindle book, so I’m following in your footsteps, who knows, maybe I’ll start making my own apps now :)

Reply

Steve Scott

Awesome Jens! For now, I would recommend sticking with the Kindle stuff. So far, this looks like the best business opportunity for the average online entrepreneur. I’m still working out the kinks in my app business…so I can’t really recommend it as a viable income strategy. Maybe that will change in a few months :-)

Reply

Jake

Thanks for very important information. Love to ready about this kind of stuff and I dont have to spend a single penny to get this kind of intesting information. Think that making money on app these days are hard. The app is more and more advanced and needs upgrades and stuff. Sounds like more work then fun. Think you need to be a coder to succes.

Reply

Steve Scott

Hey Jake. Yes, you do need some capital to get started. So it’s definitely not the best business model to start for those who are strapped for cash.

But, I don’t think you need to be a coder. In fact, I think that gets in your way of long-term success. My opinion is you need to be able to communicate what you want and then be able to describe your vision.

Reply

Wesley

Hi Steve,
I voted in hope of hearing more on your app business and your progress as it grows. I am really glad that you are now including your profit/loss revenues as you continue to grow your business! Also, I would like to see you revisit your launch jacking and video marketing series and let us know how that is going. I followed some of your tips and suggestions in that post and am having a really good time with that type of marketing. Keep up the great work and all that you do for us out here!

Reply

Steve Scott

Hey Wesley,

Glad you like the profit/loss stuff. I’m making a more conscious effort to create more of this type of content. It does look like people want to hear more about the app stuff…so I’ll get cracking on that!

The launch jacking stuff is something I’m no longer discussing. It does make money, but I’m more concerned with building stuff that adds to my overall business. Here is a more detailed explanation of my thoughts on this:

http://www.stevescottsite.com/truth-niche-sites

Reply

Buzz

Hi Steve: Looking forward to reading more about apps. I do have a question, actually two questions. What language are apps written in? Can an app access a blog? I have several blogs (sports themes) and some knowledge of Java and CSS. I would like to be able to allow access to my blogs through an app.

Thankls for your time,
Buzz

Reply

Steve Scott

Hey Buzz,

I have a programmer who does the programming in Objective-C. To be honest, I’m NOT a techy guy. I’ve just learned that’s the best language to have programmers design and app; where you can control the code and easily pass it along to someone else if you want future app designs.

Hope this helps…

Reply

Amit

Great article. Thanks for sharing iphone app case studies. I wish that engineering students should also be given these kind of live experiments to do.

Reply

Steve Scott

Thanks Amit! I’m trying to focus my content on giving specific examples from my own businesses…

Reply

Md Firdosh

Thanks author for sharing this information about the cost of making of iphone apps.

Reply

Steve Scott

Thanks MD. By the way…my name is Steve – Not author :-)

Reply

SuccinctBill

I’m totally interested in learning more about the app-building process. It’s pretty much the way of the future. And after everyone listened to Dane Maxwell’s interview on Smart Passive Income, there’s gonna be a flood of folks out there trying to get in on the software thing.

Hook us us up with more info so you can stay at the crest of the wave.

Reply

Steve Scott

Hey Bill – I heard that interview. Fascinating information about developing software. I’ll definitely keep people posted. Probably I’ll write something when I have a lot to share that people will appreciate. So stay tuned…

Reply

Dan

hi can you write more app article pls?

Reply

Rachel Berge

Hi steve,

Thanks for sharing your case studies about cost of making iPhones app. I dont know more about cost of app’s but want more explanation from you, how to define cost of a particular app?

Reply

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