How To Develop An IoT Application: features & costs

The Internet of Things used to be rare but now it is basically everywhere: at home, in the office, on the street, at the supermarkets, and even in the countryside. Every second person has at least one smart device — from fitness trackers to robot vacuums, TVs, toasters, and the whole system with sensors and gadgets. The demand for such devices is only growing, so IoT app development seems to be a promising business idea for a startup.

Let’s find out what IoT is, which businesses use these technologies and how to develop IoT apps, and how much does it cost.

Reading time: 9 minutes

Table of contents

    What is the Internet of Things

    The definition is simple: IoT, or the Internet of Things, is a network of interconnected “things” — mobile devices, lightbulbs, ACs, and animal trackers. They measure environmental parameters, generate data, and exchange it with other devices through the Internet.

    Imagine, you have a smart thermostat connected to your smartphone, the cooling, and the heating systems. So, you can manage the temperature inside from the comfort of your bed. If you wake up and it is hot and sunny, you can turn the AC on and get the room cool before you get up. When the forecast is cold and rainy, you can turn the heating on in advance and make your home warm and cozy. Sounds like a dream, right?

    To make the IoT work, you will need 4 key components: a device, a cloud to store the data, software to manage information, and a network to exchange it with other devices.

    📝 Overview of the main IoT components

    1. Hardware

    Hardware can include smartphones, control panels, motion sensors, measuring tools, and many other devices. It is the base of the Internet of Things system. Usually, startups work with third-party companies that provide ready-made and customized IoT hardware, so you do not have to worry about it much.

    Several smart devices

    2. Cloud

    To put it simply, a cloud is a network of servers with databases that can be accessed remotely. Smart devices send all data to the cloud where it is collected, processed, and stored. The good thing about cloud-based platforms is that you don’t need any physical space to store the user’s information.

    3. Software

    Think about it as a dashboard that presents all information and lets you manage it. Usually, the user-end of it is represented by an IoT app that can be web, mobile or cross-platform.

    4. Network

    It establishes communication between all Internet of Things devices. The connection can use different data and network protocols: WiFi, Bluetooth, LAN for stationary devices, HTTP, or others depending on use case scenarios.

    What is happening with the IoT market

    The IoT market is currently booming. There are over 14 billion connected devices globally and the number is projected to grow every year. 

    • Revenue of IoT apps and devices is expected to reach $413.7 billion by 2031.
    • Global VC funding for IoT-focused companies increased to a record $1.2 billion in Q1 2022 compared to just $266 million in the same quarter last year.
    • Supply chain shortage and global chip shortage caused by the pandemic slowed the market growth.
    • Work from home and lockdowns increased the demand for the adoption of IoT technology.

    Overall, forecasts are positive about fast market recovery. Even though the production of devices has seen a decline, the increase in user demand and investments show that IoT app development is a budding area for new startups.

    📲 What industries IoT apps are popular in

    The Internet of Things can be applied in any industry, but in some areas, it is more in demand than in others. Here are 5 popular fields for IoT application development.

    🏠 Smart homes

    Automated homes and houses let you control appliances remotely. From plugs and outlets that are connected to your phone to Smart TVs, toasters, lightbulbs, ACs, heating systems, locks, speakers and other IoT solutions.

    🌃 Smart cities

    It is the future of the cities: similar to smart homes but on a bigger scale. The IoT technology serves a certain urban area with one goal — to make life there more efficient and comfortable. 

    👨‍⚕️ Healthcare

    In healthcare app development IoT is used for monitoring patients and devices. For example, insulin pumps, wheelchairs, defibrillators, oxygen pumps, and others.

    🚛 Logistics

    An IoT platform can help with transporting people and goods. It can be used remotely to control trucks, warehouses, and cargo via GPS or satellite.

    🛍 Retail

    The use of smart devices in retail is improving the shopping experience. It helps to locate items and provide cashierless check-outs. One of the most well-known examples is AmazonGo, an experimental grocery store where a customer scans a personal QR code at the entrance, puts groceries in a bag, and walks out. The Walk-Out technology scans what products are in the bag and bills customers’ Amazon accounts. 

    Cashierless check-outs Amazon Go is open only in America and in the UK

    3 examples of IoT Apps

    Google Home

    Google Home is an IoT app to control, organize and manage compatible devices connected, and others. They use Wi-Fi to change the settings of the heating, lighting, and noise level of TVs or speakers.

    The home screen is the dashboard that contains data from connected devices, shortcuts, and personal routines. The second screen displays the history of actions. There, users can see every request, command, response, or adjustment done in the app or through Assistant. 

    The main screens of the Google Home appThe main screens of the Google Home app


    Latch is an IoT app that is popular in the United States. It controls smart locks in apartment buildings: from a front door to elevators, a lobby entrance, a terrace, and a mailroom.

    The interface is simple: users see the list of spaces that they have access to, choose the door they need and click the unblock button. The app uses Bluetooth to connect to the latch and open it. Also, users can share access with the guests and see the history of “unlocks.”

    Latch app screensLatch provides detailed information about every door a user has access to


    SpotHero is a parking IoT app that gathers data about available parking lots and garages nearby, and then displays it on the map with prices and directions. You can reserve a spot in the app and add your license plate number to the booking. When you arrive, the scanner will read your plate, find the reservation and open the gates. Also, some lots from the app have sensors to detect when a particular vehicle enters or leaves the parking area. Then you can see this info in the activity history.

    A map displayed in SpotHero appSpotHero uses Apple Maps APIs

    What features does the IoT app need

    The set of features can be very different, depending on the industry you work in, end goals and user’s needs. We put together a list of some must-have and nice-to-have features for an IoT app

    Core features

    🙆‍♀️ User profile is an essential feature for the Internet of Things systems. Smart apps are all about personalization, and in order to provide a top-notch customized experience, you need to get familiar with your user. Ask for all information you need: personal data, notification preferences, presence sensing, security, and privacy settings. Don’t forget to help add all smart devices to the app. This feature will be beneficial for your marketing team as well — when you know your audience, you can send them triggering emails and push notifications.

    📈 Dashboard does the important job of displaying all collected data — available parking spots, inside the room temperature, approaching buses — depending on the type of your IoT application.

    Google Home dashboardGoogle Home dashboard

    📱Notifications help users stay up-to-date and receive real-time updates on any changes. For example, smart doorbells use motion sensors and send a notification to a user’s device when there is a movement around the door.

    🔒 Security features can include app locks, such as FaceID or PIN-code, access control, and secure communication channels to transmit data. When you store a lot of personal data and sensitive information, security features cannot be missed.

    Nice-to-have features 

    💌 User feedback is the way for the IoT application to collect opinions for customers and find opportunities for improvement. Traditionally, apps have a form for submission where users can provide details of the issue and attach a screenshot.

    🧭 Onboarding is essentially a series of screens that guide users through the app’s interface and main functions. It is well-desired for a positive user experience. 

    📓 Activity history shows what devices were turned on or off, how they moved and what actions were taken in the app.

    Activity history in the Google Home appActivity history in the Google Home app

    ⚙️Customization can include shortcuts, routines, and saved devices for faster access to getting things done. The more things can be customized, the better the user’s experience will be.

    How to create an IoT app in 5 steps 

    Step 1. Clarify your concept 

    The first step is to create a strategic plan and define the vision of your IoT app development process. To start, you will need to decide if you want to build the platform from scratch or use similar ready-made solutions as a base. Moving on, choose your goals and target audience. Then, define key functions and specifications of the future platform with the development team.

    Step 2. Design the app

    Design has a big impact on user experience, and when it is poor or underworked, it can be a downfall for your app. Therefore, make sure you pay enough attention to this stage and actively participate. At this step, your IoT app development team will map a user’s journey, create the flow and come up with several options for interface design. After you pick the screens you like, designers will build a UI kit with UI elements, fonts, colors, and styles for the platform. 

    Step 3. Develop an MVP

    MVP, or minimum viable product, that helps startup owners test out the idea with real-world customers. Do not confuse it with a prototype or a mock-up: MVP is a completed and fully-functioning solution. Essentially, it is the first version of your mobile application with a limited set of must-have features that are needed for the platform to provide planned services. 

    Step 4. Collect feedback and improve

    After you release your MVP, you will need to gather customer’s opinion on the solution and improve or pivot it. The simplest way to get the answers is to ask, so no surprise the most popular approach to this step is an in-app survey.

    Step 5. Maintain after launch

    After you collect feedback, analyze the data, and perfect the product it is time for a final launch. But the work of the software development team doesn’t end there. They help with post-release support, app updates, and scaling up.

    How much does it cost to build an IoT app  

    How to build an IoT app on a budget? We know the answer. Here is what budget you need to plan for each type of Internet of Things application.

    🚨Disclaimer: This is our estimation for the development for IoT and we don’t guarantee other companies have the exact costs or timelines. The following quote is valid only if you decide to develop a product with us.

    App typeCostTimeline
    Smart home$55 000 – $65 0003 – 4 months
    Retail$50 000 – $60 0002 – 3 months
    Telehealth$60 000 – $70 0003 – 4 months
    Wearables / Fitness trackers$47 000 – $57 0002 – 3 months

    The exact project budget will depend on the details: your idea, preferences, number of functions, and design additions. The final price can be named after consultation with the development team.

    Our experience with IoT app development 

    At Purrweb, we believe that Internet of Things development is the future. We develop IoT apps, which connect various devices into an automated ecosystem, with a focus on modern and robust UI/UX design and cost-efficient software development approaches.

    Сhallenges in IoT mobile apps development 

    From our experience, we know that IoT development has various types of challenges that you need to pay attention to.

    • Poor connectivity;
    • Insufficient testing;
    • Hardware malfunction;
    • Lack of encryption;
    • Default passwords;
    • IoT malware;
    • Government regulations.

    With some of the challenges IoT development brings, it is imperative for startups to choose an experienced studio with similar cases in the portfolio. The developers should not only know how to build an IoT app but also, most importantly, how to riddle out sudden issues and roadblocks.

    Our cases and key takeaways

    At Purrweb, we worked with mobile app development for several global IoT solutions and had to do impossible things to overcome the challenges. From puzzling out basic Chinese in a month to building an app for smart fridges in 6 weeks. Here are our cases.

    ❄️ Vendify is an Internet of Things application for smart vending machines. Unlike a traditional vending machine, with Vendify the purchase happens on a smartphone: a user just scans a QR code of the fridge, chooses a meal, pays, and grabs it. For this app, we built a preventative system against thieves and designed our own payment form because the third-party library we used didn’t support the customization we needed.

    READ MORE  How we developed an application for smart fridges in 6 weeks. Vendify case study

    🔌 EnerGO is a startup for renting power banks at the subway stations in Moscow. The main challenge here: the hardware was from China. We had to solve a puzzle of why originally Chinese stations didn’t work with Russian SIM cards and how to change the IP of stations without any language knowledge.

    READ MORE  How we puzzled Chinese language out in a month and developed our first IoT project

    How useful was this post?

    Rate this article!

    4 ratings, аverage 4.8 out of 5.

    No votes so far! Be the first to rate this post.

    As you found this post useful...

    Follow us on social media!


    FAQ s

    • What is the Internet of Things?

      IoT is a network of interconnected devices that measure environmental parameters, generate data, and exchange it with other devices through the Internet.

    • What are the main components of the Internet of Things?

      To make the IoT tech work, you will need 4 key components: a device, a cloud to store the data, software to manage it, and a network to exchange information with other devices.

    • What is the best protocol to exchange data between smart devices and the system?

      The network can use different data and network protocols: WiFi, Bluetooth, LAN for stationary devices, HTTP, or others depending on use case scenarios.

    • What are the 5 steps of IoT development?

      Plan your framework ➡ design the app ➡ develop and MVP ​​➡ collect feedback ➡ launch and support.

    • How long does it take to develop an IoT app?

      On average, the IoT app development will take from 2.5 to 3.5 months, depending on the type of platform you choose.

    • How much does it cost to create an IoT app?

      It can cost anywhere from $50 000 to $60 000 to develop your own Internet of Things application.