How Much Does it Cost to Develop an IoT Application?


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IoT is an acronym for the Internet of Things. It is the technology by which one device is connected to the other device on the internet. In other words, Internet of Things can be defined as the network where physical devices such as vehicles, appliances, sensors etc are connected to one another and share data.

There is a great scope in this field of technology. There are various fields in which IOT can be implemented. Some of these include health sector, smart home, smart city, industrial automation, and many more. Hence, a lot of IoT applications can be developed.

In order to develop good IOT applications or to provide internet of things solutions, we need to hire top mobile app developers. Cost is the main concern to develop any application. The cost of developing an application varies with its type.

In this article, we will discuss the cost to develop an IOT application. We will also throw light on the different factors affecting the cost of developing an IOT application.

If you are going to develop IoT applications, it is mandatory that you have an idea about your targeted audience and competition level in the market. To get an idea about the competition level, you need to do a lot of research.

Just do it in a systematic way, as follows:

  1. The concept of the App:

    First of all, you have to study your idea for developing an IoT application. You also should have the correct knowledge of the market.

    Do research on the type of product on which you are going to work and compare it with the existing similar applications. After comparing, you will come to know which features you have to work to make your app unique.

  2. Proof of Concept (PoC):

    In the second step, create a copy of PoC. As you have already analyzed the market trends, you can easily create a PoC. The PoC is a report based on the App concept which deals with the functionality of the end product. The Proof of Concept gives a little idea about the cost of IoT implementation.

Read More: The Internet of Things: IoT Solutions and its Benefits

Factors affecting the cost of developing an IoT application:

There are various factors that affect the cost of IoT implementation. Before discussing such factors, first, let’s have a look at some general factors.

The basic factors include:

  • The type of app you are going to develop.
  • The features by which the app is going to be loaded.
  • How complicated is the app functioning?
  • Types of technology employed.
  • A number of connections to the device.
  • Location.

Apart from the above basic factors, there are three main factors that affect the cost of IoT app development.


Hardware is one of the most important factors in estimating the cost of IoT app development. This is the factor on which most of the production cost depends (approximately 70% – 80%). The development cost varies on the type of hardware being used in a project.

The more complex is the technology, more will be the cost of implementation. Talking about the IoT application, the cost depends on the number of hardware devices involved in a connection. If the IoT application requires more connections, the cost is high and vice versa.

Technically, we can say that the cost of IoT application is directly proportional to the number of hardware devices required in connection. But if the cost of gadgets drops to a great extent, the rise in the cost of IoT apps development will be minimum.

This will be the good news for the start-up companies or new entrepreneurs who do not have enough money to invest. This had happened from the year 2004 to 2016 where the cost of smart sensors had fallen up to 200%.

From the above explanation, we can conclude that the prices of gadgets can bring a heavy change in the cost. Hence, even simple projects may be too expensive.


The infrastructure is the second most important factor influencing the cost of IoT app development. Depending on the apps and gadgets to be connected to a network, the investment cost on IoT varies.  The more complicated is the support system, more will be the cost.

Based on the components of IoT, the IoT infrastructure is categorized into the following three types:

  • Network: The IoT works with a highly scalable wireless network infrastructure and high-speed connections such as WiFi, a cellular network, Bluetooth, etc.


  • Middleware deals with the installation of third-party gadgets to a network. For example, a software that works as a connecting link among the IoT components/devices.


  • Cloud-based infrastructure: The cloud-based infrastructure is also known as the data center infrastructure. It deals with the storage solutions.


In this part, we will discuss how the size of a project affects the cost of the Internet of Things applications development. Projects are categorized into three types, namely small, medium, and large-scale projects.

The development of IoT applications for smart home appliances such as a smart refrigerator is much easy and cost-effective than a self-driven vehicle. Hence, the small-scale projects will cost less as compared to that of the large-scale projects.

Let us take another example, an IoT application for ECG monitors will cost approximately from 3000$ – 4000$ whereas IoT for fitness machines will cost approximately from 30000$ – 35000$.

There is also a hidden cost in every type of infrastructure. Due to such hidden costs, companies require investing more than expected. Let’s take an example to explain how the hidden cost increases the investment amount.

Suppose, an application to help the blind people is launched by a company, say XYZ company. Then the company has to establish a customer support team to provide services to the blind 24 x 7.

Besides this, one more factor that affects the IoT cost, Security, and Safety tests. After the development of any application, it is mandatory to test all its features. These quality tests have to carried out before launching the application.

Hence, it requires an extra cost. Quality checks are necessary as these let you know which functions of the application are not working well. So that, you can improve the functionality of the IoT application.

Estimate costs to develop IoT application in various fields in the U.S.

An approximate cost of IoT app development is as follows:


  • Media: from $10,000


  • Environmental monitoring: from $10,000


  • Infrastructure management: from $25,000


  • Manufacturing: from $50,000


  • Energy management: from $27,000


  • Medical and healthcare systems: from $30,000


  • Building and home automation: from $50,000


  • Transportation: from $25,000


  • Management of cities and systems: from $50,000


  • Consumer IoT apps: from $35,000


It is impossible to determine the exact estimate for developing IoT applications in various fields. However, we can predict an approximate cost by studying the above-listed factors.