IoT app development in 2024: in-depth guide (step-by-step process, examples, cost)

17.08 billion – that’s how many connected Internet of Things (IoT) devices are out there in 2024, expected to almost double to 29.42 billion by 2030.

It’s a massive market, too, reaching a value of $714.8 billion in 2024.

So, if you’re building an IoT device, you’ll have stiff competition – and the best way to stand out from the crowd is by building a top-notch IoT app.

But, what exactly is an IoT app and how do you build one? And how much does it cost?

Here, we’ll discuss these questions (and more!) and give you a step-by-step guide on how to build an IoT app your users will love.

Let’s dive in!

What is an IoT app?

So, let’s start with the basics – what exactly is an IoT app?

An IoT app is a software application through which users interact with and control IoT devices.

You can build both mobile and web IoT apps, depending on your specific needs.

They’re a key part of the IoT triangle, along with cloud services and the IoT device itself.

source: Limmat

Your IoT app is the primary point of contact between your users and your device.

But, how exactly does it fit into your IoT ecosystem? And how does it work?

Let’s find out!

How does an IoT app work?

Like we mentioned before, an IoT app is a key part of the IoT ecosystem and allows users to control and manage an IoT device.

And in the typical four-layer IoT architecture, it’s a part of the application layer.

source: ResearchGate

Now, while this diagram might seem confusing at first, the way it works is (relatively) simple.

The IoT device, or perception layer, has sensors and embedded software that allow it to communicate and share data with the app and other systems.

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The data is transmitted through the network layer to the middleware layer, i.e. through cloud services and databases, where it’s stored and processed before being delivered to the app itself.

And it works in both directions – both the IoT device and app can receive and send data through the middleware and network layers.

But, what do you need to build an IoT app?

Here’s what a typical IoT app tech stack looks like:

IoT app development tech stack

So, to build the app itself, you use the same tools and languages you would use to build any other app.

But, you also need to use IoT-specific technologies and platforms so it can seamlessly connect with your device.

Best industries for IoT

Here, we’ll take a look at industries that are the best fit for IoT.

Fitness and healthcare

Fitness is likely the first industry that comes to mind when people think of IoT devices.

And it’s no surprise – fitness trackers, smart watches, and other wearables are a common sight.

But, IoT in fitness isn’t just about the latest wearable gadget. Here are a few of the top fitness IoT devices you can build:

source: Riseapps

IoT healthcare devices aren’t far behind, either.

There are plenty of use cases for IoT in healthcare, like:

• Wearable devices – heart rate monitors, wearable ECG monitors
• Implantable devices – smart pacemakers, glucose monitoring implants
• In-hospital devices – bed sensors, smart IV pumps
• Emergency response systems – fall detection devices, medical alert systems

And these IoT systems have a real impact.

The data they collect is used to provide personalized solutions to users and patients, which improves their outcomes.

And since they collect a lot of data, they come in handy for medical research, too.

Smart homes

Smart homes are practically synonymous with IoT.

And they wouldn’t exist without IoT and IoT devices, which allow all the different devices and appliances to communicate with each other and the homeowners.

It’s a huge market, too – valued at $84.5 billion in 2024 and projected to reach $116.4 billion by 2029.

source: TechTarget

Some of the top use cases for IoT in smart homes include:

• Smart lighting
• Smart thermostats
• Smart locks and cameras

And that’s barely scratching the surface – practically every appliance can be turned into a smart device using IoT.

Retail

Retail is another industry that hugely benefits from IoT – and IoT in retail is another huge market, too, valued at $72.97 billion in 2024.

While the use of IoT technology isn’t as obvious as in healthcare or smart homes, it’s still there.

Here are some of the top IoT use cases for retail stores:

source: Rishabh Software

Most aren’t visible to customers but they have a significant impact for the businesses using them.

These IoT systems help them:

• Improve their operational efficiency – cold chain monitoring, predictive maintenance
• Create a better customer experience – smart shelves, checkout automation
• Make data-driven decisions – buyer behavior tracking, product placement

In short, they help their customers and increase their revenue.

And that’s why they’re a good investment.

Examples of great IoT apps

One of the best examples of an IoT app is Fitbit.

The app integrates with their fitness trackers and smartwatches and collects data on health metrics like steps taken, heart rate, and sleep patterns.

source: Android Central

Fitbit’s app and wearable devices are quintessential IoT apps and devices, as well as one of the first IoT apps widely adopted by customers.

And although they lost their dominant market share to Apple’s Fitness app and the Apple Watch, they deserve a mention because they helped popularize IoT apps and wearable devices.

Another great example of an IoT app is the Nest app.

It connects with the Nest smart thermostat and other Nest IoT devices and lets users control them remotely.

source: Pocket-lint

With the app, users can:

• Change the thermostat’s temperature using their phone
• Get alerts from the security cameras
• Arm and disarm the alarm system
• Get alerts from the smoke and carbon monoxide alarm

And it’s a great example of the potential IoT apps have for user convenience.

Finally, we’d like to highlight an IoT app we built for our long-time client – Vitastiq.

Vitastiq is a pen-like device that helps users track vitamins and minerals in their body, with 4 companion apps: iOS and Android for personal use and Android Pro and a web app for business use.

The apps needed a thorough UX/UI redesign and performance updates and that’s exactly what we did.

We improved their performance and speed and designed a sleek, minimalist UI for a better user experience.

And that’s key to every successful IoT app.

7 key steps to building an IoT app

Next, we’ll give you a step-by-step guide on how to build an IoT app.

Do market research first

Before you start building your IoT app, you first need to understand who you’re building it for.

And that’s where market research comes in.

It will help you identify your target audience, i.e. the people who are likely to buy and use your app and device.

That’s the first step to validating your idea and getting to a product-market fit, which is crucial if you want your app to succeed.

And it’s especially important if you’re a startup – misunderstanding their target market is one of the top reasons why startups fail.

If you want to learn how to get to a product-market fit, we recently hosted Tim Eckert, partner at Peakora, on the Roadmap and discussed their 6-step product-market fit process for startups:

In short, you should do market research because it will help you:

• Get to a product-market fit
• Effectively position your product
• Find gaps in the market
• Prioritize key features

And that’s key to building a successful IoT app.

Define your IoT app’s requirements

Before you start developing your IoT app, you need to first define its requirements.

And that means writing a detailed software requirements specification (SRS) document.

Think of it like a blueprint for your app – it lists everything you need to build it and will help keep your team on track during development.

Here’s what a typical SRS document looks like:

Now, every app’s SRS will be unique and you don’t need to include every element listed above.

But, the two you can’t skip are your app’s functional and non-functional requirements.

In layman’s terms, functional requirements describe what your app does (its features and functionalities) while non-functional requirements describe how it does it (performance and security metrics).

Detailed and clear requirements are especially important when developing an IoT app.

Since they need to be connected to a device, your requirements will be more complex compared to a standard app.

And you’ll need to cover some IoT-specific requirements like:

• Device integration and communication protocols
• Real-time data processing
• Supported network protocols
• Interoperability with your hardware

Covering these in detail will help you identify potential issues early and come up with solutions before you even start developing your app.

And that’s key to successful development.

Pick the right hardware components

Next, you need to pick the right hardware components for your device before you start building your IoT app.

Of course, if you already have an IoT device and you just need a companion app, you can skip this step.

Now, the specific components you’ll need will depend on what your device does – here are some essential components you’ll need:

• Sensors – temperature, motion, proximity, light sensors
• Actuators – motors, valves, solenoids, relays
• Microcontrollers – ESP32, STM32, Arduino
• Communication modules – Wi-fi, bluetooth, Zigbee
• Power management – batteries, power supply units
• Memory and storage – SD cards, flash memory, EEPROM
• Connectivity interfaces – USB ports, ethernet ports, serial interfaces
• Displays – LCD screens, OLED displays, e-ink displays
• Cameras and microphones

Luckily, you don’t need to build your own, unless your device is extremely complex, and you can easily source these components.

source: Arduino Store

And better yet, you can use more comprehensive IoT hardware solutions like:

• Particle – an end-to-end IoT platform that also offers hardware solutions like development boards and system-on-modules (SOMs)
• Arduino – offers a wide range of microcontrollers with an easy-to-use development environment
• Raspberry Pi – powerful single-board computers that can integrate with a wide range of sensors and other IoT components
• NVIDIA Jetson – high-performance GPUs designed for edge computing on IoT devices and running complex AI models on-device

When choosing hardware components, you need to make sure they’re compatible with each other and can easily integrate with your IoT platform and app.

We’ll cover how to choose the right IoT platform next. 

Choose the right IoT platform for your app

Choosing the right IoT platform is essential if you want to build a successful IoT app.

IoT platforms are the glue holding your IoT ecosystem together and connect your IoT devices with your app.

Here’s how they work:

source: Yonomi

They have a range of built-in tools and capabilities like:

• Device management – Tools for registering, monitoring, and managing connected IoT devices
• Connectivity management – Supporting different communication and network protocols for reliable data transmission
• Data management – Collecting, storing, processing, and analyzing data generated by IoT devices
• Security – This includes authentication, encryption, access control, and compliance with security standards

And these are essential if you want to build a usable and successful IoT app.

Some of the top IoT platforms out there are:

• Cumulocity IoT 
• Microsoft Azure IoT 
• AWS IoT 
• ThingWorx

When picking a platform for your IoT ecosystem, make sure it can support your specific needs.

For example, if you’re building an industrial IoT solution, your top choices should be ThingWorx and AWS IoT – they’re specifically geared towards industrial IoT applications.

And once you’ve made your pick, you can start building your app.

Develop your app and connect it with the hardware

This step is where the magic happens and your IoT app takes shape.

Here, your team will take your requirements and design and turn them into a functional, usable app.

And the process and deliverables are the same as with any other app:

• Front-end/mobile UI development
• Back-end development
• API development

We won’t get into the nitty-gritty of each of these, but there’s a couple of things you should keep in mind.

First of all, your IoT app needs a solid back-end that can reliably handle data storage, processing, and communication with your hardware.

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You should use robust frameworks like Java Spring or Node.js to build it.

Also, you need to ensure your APIs, especially if you build them yourself, can reliably connect your app with your IoT platform and device.

You should rigorously test them and make sure they fully meet your requirements before integrating them into your app.

Thoroughly test your IoT app

If you want to build a high-quality app, you need to thoroughly test it before launch.

And that’s even more important when building IoT apps because they have more moving parts and things that can go wrong than normal apps.

So, what do you need to do?

For starters, you need to have strict quality assurance (QA) and testing protocols and cover every possible angle during testing.

And this means using a variety of testing methods, like:

• Functional testing
• API testing
• Security testing
• Performance testing
• Interoperability testing
• Network testing
• Integration testing

Also, here’s an important tip – you need to integrate QA from the start.

There’s a very simple reason for that – fixing bugs and defects in the early stages of development can be up to 100x cheaper than fixing them after deployment.

So, if you thoroughly test your app, you’re not just making sure it’s high-quality, but also saving a lot of time and money.

And that’s why it’s essential.

Get user feedback and iterate

Your app’s launch is just the start – and you can’t afford to stand still.

You need to be ready to collect user feedback and iterate on your app immediately after launch.

And the best way to do that is setting up a feedback loop.

It’s the best way to continuously collect, analyze, and iterate on user feedback to improve your app.

The sooner you get to the feedback loop, the sooner you can give users what they actually want.

Marko Strizic, DECODE co-founder and CEO

You just need to make sure to collect feedback from multiple channels, like:

• Customer reviews
• Feedback forms
• Focus groups
• User interviews
• In-app surveys
• Questionnaires

Once you’ve analyzed, prioritized, and iterated on the feedback you’ve received, you need to follow up with users and repeat the cycle.

And that’s how you build an app that users will keep coming back to.

Top challenges when building an IoT app

Here, we’ll discuss the top challenges you’ll have to overcome when building an IoT app.

Security

Security is one of the biggest challenges you’ll have to deal with when building an IoT app.

Of course, perfectly secure systems don’t exist.

The only truly secure system is one that is powered off, cast in a block of concrete and sealed in a lead-lined room with armed guards – and even then I have my doubts. 

Gene Spafford, computer science professor at Purdue and computer security expert

But, IoT devices and apps are uniquely vulnerable compared to standard apps. Here’s a few of their top vulnerabilities you need to look out for:

source: Cardinal Peak

And the stats prove it, too.

On average, there are 5,200 attacks on IoT devices each month with 7 million data records compromised daily – and a successful data breach, on average, causes $330,000 in damages.

IoT systems are common targets because they’re widely distributed and often have weak security protocols.

And IoT devices are often used as entry points for larger breaches.

Luckily, you can take steps to prevent that from happening to your app, like:

• Implementing end-to-end encryption
• Regular security updates and patches
• Multi-factor authentication and strong password policies
• Regular security audits and penetration testing

This way, you’ll minimize the risk of major breaches compromising your users’ data and your bottom line.

And that should always be your goal.

Scalability and data management

Scalability and data management can be a huge problem when building IoT apps.

That’s because IoT devices and apps generate huge amounts of data.

And that’s no exaggeration because they’re expected to generate 79.4 zettabytes of data in 2025 – that’s 79.4 trillion gigabytes!

So, when you build your IoT app, it needs to be able to handle huge data volumes – in other words, it needs to be technically scalable.

But, that’s just the start. You also need to consider operational scalability.

source: Losant

Operational scalability is your business’ ability to scale business processes and systems as demand for your app grows – it’s just as important as your app’s technical scalability.

Now, if you use the cloud-based IoT platforms we’ve mentioned earlier, you won’t have to worry too much about technical scalability.

But, when it comes to operational scalability, business process automation (BPA) is your best friend.

It will help you scale your business as demand for your product grows, without sacrificing your performance.

And that’s exactly what you should want.

Interoperability

Making sure the various parts of your IoT ecosystem are interoperable is another major challenge when building an IoT app.

That’s because it has a lot of moving parts – and each part needs to be able to communicate with the other parts, often in both directions.

Here’s an example of how that works:

source: Mouser Electronics

And since you’ll likely use components from various manufacturers, they might have different communication protocols and standards.

So, getting them to work well together can be very difficult – but, there are ways you can mitigate that, like:

• Using standard communication protocols (HTTP, MQTT, CoAP)
• Developing robust APIs
• Using middleware solutions to bridge the gap
• Using components certified by the Open Connectivity Foundation (OCF)

This way, you’ll ensure your whole IoT ecosystem works as intended.

How much does an IoT app cost?

So, now that we’ve covered everything, all that’s left is answering the big question – how much does an IoT app cost?

Unfortunately, there’s no simple, black-and-white answer to that question.

How much it will cost depends on a number of factors like:

• The complexity of the app
• The number of different devices it integrates with
• The custom features and integrations it needs
• Size and expertise of the development team

So, pinning down the cost of IoT apps is difficult – but, we can give you the typical cost ranges based on complexity:

• Basic IoT app – $10,000 – $50,000
• Advanced IoT app – $50,000 – $250,000
• Complex IoT app – $250,000+

For example, an enterprise-level supply management IoT app that integrates with a lot of devices will cost a lot more than a fitness tracker IoT app that integrates with a single device.

You’ll need to contact a software product development company for a more accurate estimate, but you can expect it to be in this range.

IoT app development: FAQs

Need an IoT development partner?

Are you looking for a development partner for your IoT app but haven’t found the right fit yet?

Well, you’re in the right place.

In the past 12+ years we’ve built a number of IoT apps in industries ranging from healthcare to HVAC.

So, not to boast, but we’ve got what it takes to build a great IoT app that will seamlessly integrate with your IoT device.

If you want to learn more, feel free to reach out and we’ll set up a call to discuss your needs in more detail.