How much does IoT cost?
Looking back at the Internet of Things projects we’ve completed for our clients over the years, we’d say that the minimum IoT solution development cost is $50,000 (hardware and software included).
But this figure can be elusive, just like the Internet of Things term itself.
After all, a storage facility with BLE tags is an IoT solution—and so is a custom fitness tracker working in sync with a smart scale and connected workout equipment.
To help you plan your budget wisely, we’ll provide ballpark IoT cost estimates for some projects from our portfolio, weigh in on the Internet of Things challenges we faced in the development process, and give tips to reduce the Internet of Things cost.
Table of Contents
IoT Cost Estimates from the Expanice Portfolio
Project 1: An iOS App for a Custom ECG Device
Project 2: A Comprehensive Smart Curtains Control System
Project 3: A Complete Cryo Chamber Management Suite
Project 4: iOS and Android Apps for a Connected Exercise Bike
Project 5: Mobile Apps for Smart Radiation Monitoring Devices
How Can Your Startup Reduce an IoT Project Cost?
FAQs
IoT Cost Estimates from the Expanice Portfolio
Disclaimer: all the IoT cost estimations given in this article are based on the median Eastern European developer hourly rates, which range from $30 to $60 depending on an IT specialist’s qualifications, seniority level, and job role.
Aside from the location of software and hardware engineers, IoT development cost can be determined by a variety of factors, including project scope and complexity, security and compliance requirements, ongoing maintenance, and integrations with internal and external systems, among many others.
Scroll down to learn about the cost of IoT solutions created by the Expanice team!
Also, feel free to use our software development cost calculator to estimate the cost of your custom IoT product! Please keep in mind that the calculator estimates the cost of IoT development over the course of the project, assuming you are starting from scratch. If you want to create a minimum viable project (MVP) version of your IoT system, you can use more cost-effective technologies like no-code and low-code platforms and trim down the product's feature set to reduce IoT development costs.
Project 1: An iOS App for a Custom ECG Device
An IoT cost estimate for medical solutions will most likely include a discovery phase, which might take two to six weeks to conduct
Project Background
A US-based digital health startup created a custom heart rate monitor that captures the electrical signals of a human body. The device can be used both in hospital settings and at home, helping patients and caregivers diagnose heart conditions and observe their progression.
Challenge
The customer turned to Expanice to create an iOS mobile app for visualizing ECG sensor data in real time, listing Bluetooth as the primary IoT connectivity protocol for the project. Additionally, the client selected the Core Plot framework for sensor data visualization.
When we got down to building the mobile application, we realized that the amount of sensor data produced by the ECG tracker exceeded our expectations. Instead of rendering medical graphs at a speed of 300 dots per second (i.e., in real time), Core Plot averaged just 50 dots per second, introducing a significant delay. This was unacceptable for a healthcare mobile application, so we had to investigate other options while sticking within the initial IoT app development cost estimation provided to the client.
Solution
To hit the 300 dots per second benchmark, our team chose OpenGL — a lower-level, platform-agnostic API for rendering 2D and 3D graphics. Since Objective-C lacked a wrapper for OpenGL functions, we had to segment the Objective-C data into separate units, which is raw C. Next, we partially transferred the workload to GPU and rendered ECG sensor data using OpenGL primitives. As a result, the application could produce graphs in real time with only a 1/60 second delay at a speed of 60 frames per second.
IoT Cost Estimate
The project’s lifespan was 11 weeks, totaling 300 man-hours. In a similar project, IoT app development cost could range between $10,000 and $15,000.
Lesson Learned
As a typical startup, our client was operating on a shoestring budget and sought to reduce IoT software development cost. They approached us with a fairly detailed technical vision for the project, and we were over-optimistic to not include a discovery phase in the preliminary IoT cost estimate, opting for the Fixed Price cooperation model.
Even though we fulfilled our obligations and completed the project within 11 weeks, from then on, we’ve been recommending that our customers always kick IoT projects off with a discovery phase and, if the budget permits, sign a Time and Materials (T&M) contract. This helps us assess project requirements and IoT costs more accurately.
Project 2: A Comprehensive Smart Curtains Control System
In smart home projects, IoT development cost will largely depend on the complexity of your hardware solution
Project Background
A European home automation startup has created a retrofit IoT kit suitable for most home curtain rails. The solution features a sleek gadget equipped with light sensors. The device automatically opens and closes curtains based on a customized schedule or when detecting sunlight.
Challenge
Initially, the customer asked Expanice to create a back-end system for orchestrating smart curtain control devices and the accompanying mobile applications. We selected PHP, Vue.js, Golang, and AWS as the primary tech stack for the project. To optimize the deployment, management, and scaling of the smart curtain control solution, as well as the IoT software development cost, we implemented Kubernetes while hosting the solution on AWS EKS.
We went on to create Android and iOS apps that simplified the smart curtains’ setup and usage. Configuring the sunrise/sunset mechanism, which uses light sensors and a personalized schedule, proved to be the most challenging part of this project.
The Expanice team also developed firmware for the IoT devices and integrated the system with popular voice assistants and other smart home products via APIs.
Some unforeseen problems emerged on the horizon when the smart curtain system started to gain popularity and more devices were added to the network. The back-end infrastructure, which supported a few thousand devices, became prohibitively expensive to maintain, significantly increasing the cost of the IoT solution (and its total cost of ownership).
Solution
To optimize the cost of IoT solution implementation, we programmed the system to use spot instances (AWS EC2) rather than ordinary ones. We further set up an automatic deployment mechanism, transferring the infrastructure to vacant AWS instances in mere minutes.
Extra IoT cost savings come from device status data caching. By configuring the smart curtain control system to send status data to the cloud every two hours, we helped our client reduce AWS infrastructure expenses by 66%. Check out the full smart home case study to learn how the development process unfolded.
IoT Cost Estimate
The project is still active. The initial IoT app development cost topped $30,000, with 1,000 man-hours spent on back-end and web application engineering.
Now that we have taken over the remaining parts of the project, including the mobile app and firmware for the curtain controllers, the hour count is nearing 3,000, which exceeds $120,000 in IoT software development costs.
Lesson Learned
When building IoT solutions, the rule of thumb is to start small while having a broader picture in the back of your mind.
Sure, when you’re a startup running a Kickstarter campaign, it might be hard to believe thousands of users around the globe will one day purchase your gadget and make it part of their IT ecosystem.
But if you cannot analyze functional and non-functional requirements early on and devise an IoT architecture that is built for scale, your IoT project cost might increase in later stages because of cloud vendor fees and additional system configurations.
Project 3: A Complete Cryo Chamber Management Suite
The more features you incorporate into the pilot version of your connected solution, the higher the IoT development cost will be
Project Background
A US-based company created smart cryotherapy chambers for gyms, spa salons, and healthcare facilities. According to the client’s initial plan, the IoT solution would feature an Android app enabling users to register and pay for cryotherapy sessions.
Challenge
The Expanice mobile team created the Android app in mere weeks, bringing IoT app development costs to a minimum. Simultaneously, the customer attracted investors and tapped into our IoT development expertise to create an entire cryo chamber management suite, including programmable logic controllers (PLCs) and embedded software, a custom CRM system with POS capabilities, and cloud infrastructure.
Solution
We developed an end-to-end SaaS solution for cryo unit management featuring:
- A cryo chamber management system that detects when a patient enters a cryo chamber and monitors their body temperature and heart rate. The system also scavenges data from the oxygen and liquid nitrogen pressure sensors installed in the cryo units.
- A secure Android tablet app based on fingerprint recognition technology, which provides on-the-go access to patient health records
- A web-based console for centralized cryotherapy unit management
- A white-label cryo chamber management solution with built-in POS and CRM features
For more information on the project, see the full IoT healthcare case study.
IoT Cost Estimate
The project’s lifespan has long exceeded 40 months, breaking the mark of 3,000 man-hours in 2021. Although the cryotherapy chamber system is up and running, we keep scaling the solution and extending its feature set.
We could estimate the cost of an IoT solution like this at $40,000-45,000 in its first iteration, which spanned 1,000 man-hours. The IoT development cost for the current version of the cryo unit management system has topped $1,000,000.
Lesson Learned
Due to logistics and legal challenges (in Belarus, where our R&D center is located, the laws forbid using liquid nitrogen in most types of residential and commercial buildings), we could not lay our hands on a real cryo unit. Instead, we had to make do with a simulator.
Using a simulator is not one of the best IoT development practices, but it’s a good workaround for startups that outsource custom IoT product development to several vendors scattered around the globe.
The only drawback of this approach is that you’ll have to conduct thorough testing to validate that the software components of your IoT product work seamlessly with the hardware. But you need to do that regardless of where your developers reside and whether they have access to the physical hardware.
Scope creep was a problem, too. Having raised substantial funding, the customer was eager to incorporate far too many features into the pilot version of the cryo unit management system, which would’ve delayed the release indefinitely and increased IoT software development cost.
We navigated this problem by adopting an incremental, result-based approach to software engineering, releasing a few features at a time, and ensuring their stable performance.
Project 4: iOS and Android Apps for a Connected Exercise Bike
The cost of an IoT fitness app usually starts from $15,000 (per platform)
Project Background
A US-based manufacturer of exercise equipment for gyms and home use wanted to increase the sales of their latest stationary bike model. Equipped with speed and cadence sensors, the smart bike helps users monitor their physical activity and maximize workout efficiency.
Challenge
The client partnered with Expanice to develop iOS and Android applications that would seamlessly connect to the exercise bike management console and visualize historical workout data. They made specific provisions regarding the IoT app development cost, so we had to deal with another Fixed Price project.
Being on another continent, the customer did not provide a physical bike, so we implemented a simulator instead.
Solution
We created iOS and Android versions of the fitness app featuring three essential modules:
- A BLE-powered device integration module, which automatically finds, connects to, and remembers exercise bikes within a specified range
- A workout module, which helps users view training data by applying day/week/month filters
- A social module, which allows athletes to log into the application using their Facebook or Twitter accounts and share their progress on social media, bringing gamification elements to their workout routine
IoT Cost Estimate
The project took 14 weeks and 1,000 man-hours to complete. The cost of a similar Internet of Things solution can reach $40,000-55,000.
Lesson Learned
Once again, we did not have access to physical equipment and performed testing remotely using a simulator.
Although we elaborated on this issue in the previous project description; still, we somehow forgot to mention that working with a simulator or high-fidelity prototype can improve your time to market and reduce IoT development cost, too.
While you’re still in talks with a device manufacturing company, your embedded and mobile software engineering teams can start building firmware, middleware, and mobile applications for the IoT solution. Once the hardware is ready, you’ll only need to perform firmware flashing and validate that the whole thing works as expected!
Project 5: Mobile Apps for Smart Radiation Monitoring Devices
Ensuring top-notch security and compliance with industry-specific standards may increase your IoT cost estimate
Project Background
A US federal law enforcement agency was looking to equip employees working at crime scenes with custom devices monitoring radiation levels in real time.
Challenge
The client approached Expanice to develop iOS and Android mobile applications integrated with different radiation monitoring devices. As a governmental entity, they listed IoT security and advanced reporting as their top priorities for the project.
Solution
We built the applications with elaborate business logic and intuitive interfaces, empowering law enforcement officers to freely use the IoT solution regardless of their technology background. The apps can:
- Connect to radiation monitoring devices via Bluetooth or Wi-Fi
- Produce reports specifying the types of radioactive isotopes detected at a crime scene, a radiation detection device taking the measurements, GPS data, and the date and time of monitoring
- Send the reports to the cloud server for further analysis and secure storage
- Exchange text files, images, and videos
IoT Cost Estimate
The mobile IoT solution cost $80,000 and took approximately 2,000 man-hours to develop, test, and deploy.
Lesson Learned
It was our first experience working with a government agency. To win the opportunity, we went through a rigorous evaluation process.
On the tech side, the client expected us to suggest a powerful yet simple user authorization mechanism that would suit non-technical employees. That’s why we opted for two-factor user authentication based on strong credentials and a PIN code generator. The security features and extensive testing were both considerable IoT cost factors.
How Can Your Startup Reduce an IoT Project Cost?
Running out of cash is the #2 reason for IT startups’ failure, and IoT startups are, sadly, no exception.
To avoid getting lost in the startup limbo, plan your budget wisely and seek ways to reduce IoT project cost
There are several tips you could follow to keep IoT development cost down and avoid this scenario:
- Find a technology company with a proven track record of creating IoT solutions. Although the Internet of Things is no longer a novel concept, few tech companies have hands-on experience building anything more complex than mobile apps paired with fitness tracker. Going back to our ECG monitor case study, only 20% of IoT vendors are well-versed in low-level programming technologies. We’re not engaging in self-promotion here; we are talking facts.
- Start your IoT project with a discovery phase. Conducted by a skilled software architect, business analyst, and project manager, project discovery will help you verify your idea, identify bottlenecks early on, and align your technology and business objectives. One of our clients, for example, wanted to create a smart home security system based on motion sensors. The solution would allow homeowners to track movement both inside and outside the building. During the discovery phase, we found out that the ratio between the measured data properties prevented the software from performing certain actions—say, notifying the user of suspicious activity—automatically. That’s why we replaced the sensors with Wi-Fi video cameras. Sure, a discovery phase would take two to six weeks to carry out, adding $8,000-15,000 to your IoT cost estimate—but it’s a small fraction of what you could pay should problems arise further down the road.
- Keep your project scope under control. As a startup, you might be bursting with ideas, looking to address all of your target audience’s problems at once. But the more features your IoT product incorporates, the longer it’ll take to flesh out your ideas and release the device to the market. Opting for an MVP with just enough features to satisfy user demand is vital to reducing IoT development cost and keeping your startup afloat. Otherwise, you’ll blow your budget and never release your product. Some of our past clients did just that, and believe us, you don’t want to follow their fate. One more word of advice: use ready-made IoT prototyping tools and platforms as much as you can—at least until you find investors or run a successful crowdfunding campaign.
Finally, familiarize yourself with the key IoT-enabling technologies and distributed team management in the Internet of Things projects. And should you have questions about the cost of IoT development and implementation, just drop us a line!
FAQ: Understanding the Opportunities and Cost of IoT Development
What are some of the most promising niches for IoT startups?
The IoT landscape is vast, with numerous sectors ripe for innovation. Predictive maintenance for energy and utilities, connected consumer electronics, industrial manufacturing, cybersecurity, as well as BabyTech and FemTech solutions, are examples of such niches. These areas demonstrate not only the wide range of applications for IoT technologies, but also highlight sectors with significant growth potential.
How can IoT startups tackle the high cost of IoT development?
Managing IoT development costs effectively is critical for startups. Key strategies include starting with a discovery phase to identify technical and business requirements, maintaining a tight scope to avoid feature creep, leveraging ready-made prototyping tools, and understanding IoT-enabling technologies. These approaches help startups align their projects with market needs while controlling expenses.
What are the major hurdles IoT startups face in the development process?
IoT startups often encounter several challenges, including feature creep, which can delay project completion and inflate IoT development costs. A lack of a strong IoT monetization strategy can also hinder a startup's financial sustainability. Moreover, overlooking IoT security can lead to vulnerabilities, potentially compromising user data and device functionality.
What steps can IoT startups take to secure their solutions?
IoT startups should prioritize security from the start, employing strong encryption, secure device authentication, regular software updates, and extensive testing for potential vulnerabilities. Consider security as a fundamental component of IoT solution development to help protect against threats, build user trust, and control the Internet of Things cost.
How does the cost of IoT solutions vary across different projects?
The cost of IoT solutions can vary greatly depending on the project's complexity, scope, and specific needs. For example, IoT development costs can range from $50,000 for basic hardware and software integration to more than $1 million for complex systems with advanced features and integrations. Factors such as the expertise of the developer, the duration of the project, and the selected technologies also significantly impact the overall IoT costs.
