IoT devices have sensors and embedded software that allow them to share data and communicate with other systems.
This data is transmitted through the support and network layers to an IoT app, where users can see it.
Crucially, this process is bidirectional, i.e. both the IoT device and app can receive and send data.
In (very) simple terms, that’s how IoT apps work – other than this, you build them like any other app.
Now, you’re probably wondering how much all of this costs – we’ll discuss that next.
How much does an IoT app cost to build?
There’s no simple answer to this question.
Estimating the cost of developing an IoT app is tricky, to be sure. But, we can give you some general cost ranges depending on complexity:
Basic IoT apps – Simple apps that manage a single device and have a small number of straightforward features, like turning on smart lights. Costs are typically in the range of $30,000 to $50,000.
Advanced IoT apps – More complex apps that connect with multiple different devices and/or have advanced features like real-time data analytics. Costs jump up to $50,000 to $150,000.
Complex IoT apps – Enterprise-grade solutions that integrate with a wide range of devices and have a suite of advanced features. Complex IoT apps can easily cost $200,000+ to build.
But, that’s just how much the IoT app itself costs – these figures don’t include the cost of designing and building an IoT device.
You’ll also need to watch out for recurring costs, like cloud hosting and data storage.
How to build an IoT app: 7 key steps
Next, we’ll cover the main steps you need to follow to build an IoT app.
In (very) simple terms, functional requirements describe what your app does while non-functional requirements define how it does it.
Also, you should include user stories with your requirements to help your team better understand your user’s perspective.
But, what do these requirements actually look like?
Let’s say you’re building a companion app for a wearable fitness device. Here’s an example of what your requirements might look like:
Functional requirement – The app must let users start, pause, and stop workout sessions, while providing real-time metrics on the screen.
Non-functional requirement – The app must sync data between the wearable and the cloud within 5 seconds under normal network conditions.
User story – As a user, I want to set a daily goal for calorie burn so that I can successfully work towards my fitness goals.
But, not all requirements are created equal, so prioritization is key.
Use prioritization frameworks like the MoSCoW method (Must have/Should have/Could have/Won’t have) to choose requirements that deliver maximum value.
In a nutshell, writing clear requirements will help you keep development on track and avoid unnecessary risks.
And that’s why it’s so important.
Key tips for requirements gathering
Be clear and concise – Use simple, easy to understand language and avoid using too much technical jargon when writing requirements to avoid confusion
Include stakeholders in the process – Set up workshops and interviews with relevant stakeholders to get a broad, comprehensive view of your requirements
Use visual aids – Add flowcharts and diagrams to make your SRS document easier to understand and more engaging
Pick the right hardware components
After you’ve defined your requirements, the next step is picking the right hardware components for your IoT device.
If you already have a device and you just need a companion app, you can skip this step.
But, choosing the right hardware is key if you want to build a reliable and efficient IoT device and app.
Of course, your choice will primarily depend on your requirements and the type of IoT solution you’re building.
Some of the factors you need to consider include the type of data your device will collect, environmental conditions, power consumption, and connectivity requirements.
For example, a smart agriculture system will require sensors that can withstand harsh outdoor conditions and have low power consumption since it operates in remote rural areas.
The good news is that you won’t need to build these components yourself and you can easily source them, unless your device is extremely complex.
What’s more, you can go with comprehensive IoT hardware solutions like:
Arduino – has a large variety of microcontrollers and offers an easy-to-use development environment
NVIDIA Jetson – high-performance GPUs designed for edge computing on IoT devices and running complex AI models on-device
Particle – an end-to-end IoT platform that also offers hardware solutions like development boards and system-on-modules (SOMs)
Raspberry Pi – powerful single-board computers that easily with a wide range of sensors and other IoT components
Also, thoroughly test all hardware components before making a final decision.
They have to seamlessly work together, integrate with your IoT platform and app, and meet performance requirements.
And this is key to successful IoT app development.
Key tips for picking the right hardware
Focus on interoperability – Make sure the components you choose can easily integrate with each other, various communication protocols, IoT platforms, and your app
Make energy efficiency a priority – Use energy-efficient components tailored for low-power environments to extend device lifespan
Verify supply chain stability – Make sure your supply chain is stable and components will be available long-term to avoid costly redesigns
Choose the right IoT platform
Choosing the right IoT platform is crucial if you want to build a successful IoT app.
IoT platforms are a key part of every IoT ecosystem.
Think of them like the glue between the hardware (sensors and devices) and application (IoT app) layers.
In any case, make sure the platform you choose fully supports your needs.
It will make building your app much easier.
Key tips for choosing the right IoT platform
Choose platforms that support easy scalability – Choose a platform will allow you to effortlessly scale as the number of devices and users grows
Test platform compatibility – Before you commit to a specific platform, make sure it’s fully compatible with your device, communication protocols, and app
Evaluate pricing transparency – Platforms with usage-based pricing can have unforeseen costs, so make sure to ask for clear documentation before you commit
Build the app and connect it with the hardware
Once you’ve got everything ready, you can start building your IoT app.
Here, your development team will take your requirements and turn them into a functional and usable app.
Simple, right?
Well, if you’ve done the previous steps right, you shouldn’t have (too) many issues.
You’ll have to focus more on the backend and APIs than you would for a standard app.
Get exclusive founder insights delivered monthly
Your app will need a solid backend that can reliably handle communication with your device, data storage, and data processing.
And you’ll need robust APIs to reliably connect it with your chosen platform and hardware.
So, frameworks like Node.js and Java Spring will be your team’s best friends, as will tools specifically designed for IoT development, like Node-RED.
Also, you can even build a custom backend IoT platform from scratch, if you want one that’s fully adapted to your device.
Key tips for developing your IoT app
Monitor resource usage – Continuously track CPU, memory, and power usage during hardware-app interactions to find and fix any bottlenecks as soon as you spot them
Build robust APIs – Use REST or GraphQL APIs for secure and scalable communication between your app and hardware
Regularly refactor your code – Make sure to routinely refactor your code to keep your codebase clean, improve your app’s performance, and stay on top of technical debt
Rigorously test your app before launch
IoT apps have a lot of moving parts and they all need to work well together.
In other words, there’s a lot of things that can go wrong.
And that’s why rigorous quality assurance (QA) and testing are absolutely non-negotiable.
It needs to be comprehensive and you need to cover every possible angle and edge case you can think of.
Start by creating a detailed testing strategy. Having a structured plan will help your team plan tests and ensure comprehensive test coverage.
You also need to decide on the testing methods. Here’s a few you should use:
Functional testing – Makes sure each feature works as intended, especially your app’s core functionalities.
API testing – Ensures your APIs meet security, functionality, and performance standards.
End-to-end testing – Verifies that all components work correctly, from start to finish.
Performance testing – Evaluates your app’s responsiveness and stability under both normal and peak conditions.
Compatibility testing – Ensures your app works well across different devices, operating systems and platforms.
Security testing – Makes sure user data and device interactions are protected from vulnerabilities.
Usability testing – Tests your app’s interface to make sure it’s intuitive and user-friendly.
And that’s just the tip of the iceberg. There are plenty of other testing methods and metrics out there your team could (and should!) use.
Also, here’s a very important tip – you should integrate QA from the start.
There’s a very simple reason for that – you’ll save a lot of time and money.
Finding and fixing bugs early on in development can be up to 100x cheaper than fixing them after you’ve already launched your product.
And that’s why QA is essential.
Key tips for testing
Simulate real-world scenarios – You should test real-world scenarios and simulate real user behavior to find bugs that only happen when someone actually uses your app
Automate wherever you can – Use automated testing tools like Playwright or Selenium to automate repetitive tasks, minimize human error, and speed up release cycles
Cover edge cases – Cover edge cases, like sudden network interruptions or invalid inputs, to ensure your app works well even under unexpected circumstances
Get user feedback and iterate
Launching your app doesn’t mean development is over – far from it.
In fact, it’s just the start.
And you need to be ready to get user feedback and iterate immediately after you’ve launched your app.
User feedback is essential for continuous improvement and iterative development.
Having a feedback loop will give you a deep understanding of your users’ needs and pain points.
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
And that’s key to building a continuously successful product.
So, how can you get feedback?
You should use a variety of methods, including:
In-app feedback forms – Feedback forms directly integrated into your app to encourage users to give immediate and relevant feedback.
User interviews and focus groups – Direct engagement with users to get deeper insights into their experiences.
Reviews – Your app’s reviews will help you identify issues, potential new features, and where you can improve your app.
Analytics tools – While it’s not feedback per se, analytics tools will help you identify patterns in user behavior and understand how they actually use your app.
Once you’ve gathered the feedback, your next step is analyzing, prioritizing, and implementing it.
You should focus on issues that impact user experience first to promptly solve your users’ major pain points.
Then, you follow up with them and repeat the process.
And that’s how you build a product that lasts.
Key tips for getting user feedback and iteration
Incentivize giving feedback – Offer free trials, discounts, and other benefits to early adopters if they share detailed feedback on your app
Add feedback widgets – Integrate non-intrusive in-app widgets so users can easily leave feedback whenever they want
Keep an eye out for market trends – Make sure to keep up with emerging trends in your market so your app stays competitive and relevant
IoT app development process: FAQs
There’s no straightforward answer on how much an IoT app costs to build.
The total cost of your IoT app’s development will depend on a number of factors:
IoT device type
Size and location of the development team
App type and features
The third-party integrations it needs
Security and compliance
Long-term maintenance costs
But, we can give you the typical cost ranges based on complexity:
Basic IoT apps – These apps are typically designed to manage a single device or a small number of straightforward tasks, like turning on smart lights or adjusting a thermostat. Costs for these apps typically range from $30,000 to $50,000.
Advanced IoT apps – If you’re building an app that connects to multiple devices or requires advanced features like real-time data analytics or geolocation, costs increase significantly. These apps generally fall within the $50,000 to $150,000 range.
Complex IoT apps – Enterprise-level solutions or apps that integrate with a wide variety of devices or use advanced technologies like AI, can easily cost $200,000+ to build.
Your IoT app development timeline depends on the complexity of the app, the number of features, and the types of devices involved.
On average, developing a basic IoT app takes around 3 to 6 months.
For more complex apps, especially those involving multiple devices, advanced analytics, or enterprise-grade security, development can stretch to 9-12 months or more.
When something unusual happens, Vlado is the man with an explanation. An experienced iOS Team Lead with a PhD in Astrophysics, he has a staggering knowledge of IT. Vlado has a lot of responsibilities, but still has time to help everybody on the team, no matter how big or small the need.
His passions include coffee brewing, lengthy sci-fi novels and all things Apple. On nice days, you might find Vlado on a trail run. On rainier days, you’ll probably find him making unique furniture in the garage.