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I have to do an economic viability analysis for an iPhone app and I do not know if you could help me in some questions like link text:

  • How can I estimating an iPhone application development costs?
  • Cost per hour of a programmer?
  • Time that 1 programmer takes in doing an app similar to “Spend Free - Personal Budgeting” link text supposing that it has experience in Java but is rookie in the world of development of aplicaiones for iPhone (neither Objective-C nor Cocoa Touch knows …)
  • Time in integration testing?
  • Return on investment (ROI)?

Where can I find information?

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Your first four questions will be similar for any software project, and fall under estimation. This is a well-studied area, although still very imprecise. Your last question is something entirely different, since that depends on sales, which depend on lots of other things, and the investment is not just what you spend on software development. –  David Thornley Dec 22 '10 at 15:03
    
What were your efforts until now? I am asking because i want to help you avoid the impression you are trying to let others make your homework. –  LennyProgrammers Dec 22 '10 at 15:04
    
Most of the cost of software is in the hours of analysis, design, programming and should be used to obtain it. Of course by the information I have observed seems to be a programmer charged $ 100 to $ 125 per hour. I'm from Spain and I find tremendously. This would give us about $ 40,000 a month. OK? On the other hand would be a good estimate of the following? 250h (project duration) + 80h (for unknown) x $ 100 / h = $ 8250 The estimate I have to do as if there were only onne programmer doing the application. –  user11335 Dec 22 '10 at 17:06
    
You're considering software costs only, rather than total project costs. Those can include art, project management, requirements, marketing, among others. While the cost of the software is a valid thing to estimate, and can be very useful, it is in no way sufficient to calculate ROI. –  David Thornley Dec 22 '10 at 20:50

3 Answers 3

up vote 1 down vote accepted
  1. ROI can be a gamble. Around half the entire revenue of the App store goes to the top 1% in Paid app popularity, and around half of all Paid apps don't sell at on any particular day. Over 80% of Paid iOS apps are said to make less than $10 (USD) per day. Assume you can produce an app that climbs into the top 10% for a year or two, how much would you invest for a return of $10 to $100 per day? How much under the PV (present value) of that cash flow would you want to target expenses for the risks involved?

  2. Marketing. You left out marketing costs. Marketing costs (and time investment) can have a larger effect on ROI than development costs.

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http://felttip.tumblr.com/post/2350294498/so-you-want-to-hire-an-ios-developer

Is a pretty good post on the costs / timescales for developing an iPhone app. The TL;DR version:

  • An iPhone developer costs $200 - $1000 an hour - obviously cheaper developers will take longer so it'll even out and you'll likely end up with something worse. (This seems high but it tallies with other figures I've seen)
  • All in a good developer would likely need about 2 months elapsed time to get a good app to a shippable state
  • The likely cost is therefore about $100,000 to $150,000. The absolute minimum he thinks is feasible is around $30,000. (He assumes only half the time he might spend is chargeable if you're questioning the calculations).

There was another really good article on the over revenue which I can't find now but essentially it boiled down to:

  • There are plenty of stories of people spending a few hours on an app and making thousands but again, these aren't typical.
  • The majorly profitable apps make the headlines but they are not the norm.
  • The average application does not even come close to covering it's costs at commercial rates (see above) therefore the ROI is negative.

I can't remember the precise figure but the number of apps which are profitable at commercial rates (that is paying for the development rather than doing it as a hobby) was less than 20%. I'll try and dig it out.

Here's another interest piece (actually a reddit Q&A) from a guy who has developed for both iPhone and Android:

http://www.reddit.com/r/IAmA/comments/caq8f/iama_developer_who_sells_the_same_app_both_in_the/

P.S. Spend is a cracking application. I use it all the time - the paid version (59p - woo).

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2  
Holy sh*t, $1000 an hour? Where do I sign up? –  Robert Harvey Dec 22 '10 at 15:46
1  
@Robert - Oi! No pushing in, get behind me in the queue. More seriously it'll be interesting to see how long the market sustains at that level. –  Jon Hopkins Dec 22 '10 at 15:49

A friend of mine had a custom Iphone app made.

cost - about £100,000

2 weeks work for a team of 5

I have no idea if they thought it was a 'good deal'.

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