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The Internet of Things (IoT) has grown dramatically in popularity over the past decade, which naturally means that demand for IoT development projects has risen as well. IoT projects can span the gamut from the extremely simple to the highly complex, making it difficult to get a handle on the possible costs of an IoT project.

In this article, we’ll discuss the question of how much IoT development should cost. The short answer is that the cost of your IoT project will depend on many factors, which smart company owners can anticipate in advance.

What Should IoT Development Cost?

For starters, we should note that there’s a great deal of variance involved in estimating the costs of IoT development, based on the level of refinement or quality that you need for the product. This is one of the reasons why you may get different estimates when you reach out to potential IoT partners.

Costs will also vary depending on what point the project is at when you approach an IoT development firm. How much research have you done yourself into the idea? Have you started building the hardware and software, or is it still just a pipe dream? Questions like these will heavily influence the costs of working with an IoT development partner.

Despite these caveats, it’s possible to provide some rough figures for different types of IoT projects.

Let’s say that you want to build a consumer mobile app that can control an IoT “smart home” device. If most of the hardware functionality is already in place, you can expect the cost of development to rely mostly on the complexity of the mobile application. Typically, we see products built to be "app-store ready" in 6-10 weeks of development (depending on complexity).

The resulting cost here will be somewhere between $120,000 and $200,000. This estimate may go up or down depending on the level of synchronization required between the teams—hardware, software, firmware, and manufacturing. On the other hand, if there is substantial work to be done on the hardware, the companion application and scalable back end services, you can expect the product to cost in excess of $250,000.

For example, Very developed a consumer-ready, IoT product, leveraging Arduino libraries, a cross-platform mobile application with React Native and a scalable back end API (developed using Phoenix and Elixir) for under $250,000. This product was special in that we were able to work closely with the customer to identify the most critical feature set early on, ensuring a focused and efficient sprint. This involved wifi-pairing to a local network, high-fidelity user interface design and development, remote control of the associated hardware, and submission of the application to both the iOS AppStore and Google Play. You can view other examples of our work here.

In the next section, we’ll explore some of the factors that have the greatest influence on the development cost of an IoT project.

What Factors Drive IoT Development Cost?

In general, the more complex the project is, the higher the cost. Below, we’ll discuss some of the factors that determine how complex a project will be.

Basic Features

Every project should kick off with a research and discovery phase to determine what the client needs for the Minimum Viable Product (MVP). What features absolutely must be included in order to get the product out the door?

The more features you need in your MVP, the more the project will cost. For this reason, it’s extremely important for you to understand why you need this MVP. If it’s only for a proof of concept, for example, then you don’t need or want to spend time and money fleshing every piece out.

Infrastructure

All IoT products have three fundamental components: hardware, firmware, and software. In addition, you may want to include complementary products such as a mobile app for controlling the IoT device.

Early on, you need to decide whether your product will be more consumer-facing or back office. If it’s not going to be in the hands of non-technical end users, then you likely don’t need to put as much time into the product’s physical design. If it is a consumer-facing product, however, you’ll want to devote some effort to optimize the product’s design and user interface.

Consider as well whether your product will have any mechanical components, which adds another layer of complexity. For example, Very helped one client build a self-serve beer kiosk powered by facial recognition technology. If your product has moving parts such as beer taps, that’s another consideration you’ll have to take into account.

Cloud vs. Offline Functionality

Ideally, you should try to push as much business logic as you can into the cloud. This allows you to make changes and updates to the device itself more quickly. For example, virtual assistants such as Siri and Alexa don’t actually include voice recognition software on the device itself. Instead, they require an Internet connection to upload the recordings of users’ voices into the cloud, where each recording can be processed and acted upon.

If your product must have offline functionalities, then this can significantly drive up the expense. Business logic will need to run on the device instead of the cloud, which is a more complicated proposition that requires more granular control.

Not "one size fits all"

One takeaway from this piece: IoT projects are by no means “one size fits all.” It's highly important to analyze all of the above factors to understand what your IoT development project could cost, even before you speak with a development partner. When you're ready to dive into the specifics of what the budget for your IoT project will look like, let us know.