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, how to develop IoT apps, and how much it costs.

Reading time: 12 minutes

Table of contents

Key takeaways

    • Now there are over 14 billion connected IoT devices globally and the number is projected to grow every year. 
    • IoT platforms can be applied in any industry, but they are especially popular in finance, retail, smart homes, logistics and healthcare.
    • The exact budget for IoT application development will depend on the details: your idea, preferences, number of functions, and design additions.

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 so 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.

    • The 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 high of $1.2 billion in Q1 2022 compared to just $266 million in the same quarter last year.
    • The supply chain and global chip shortages caused by the pandemic slowed the market growth.
    • Work-from-home and lockdowns increased the demand for the adoption of IoT technology.

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

📲 What 8 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 more efficient and comfortable there.

👨‍⚕️ 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.

💸 Finance

Banks and financial institutions use IoT systems to monitor and safeguard their physical premises, like ATMs, through real-time data from cameras, sensors, and devices

IoT devices also enable smart payment systems, allowing customers to make contactless payments securely using their smartphones and wearables. 


The IoT system helps insurance companies assess risk more accurately by collecting data from connected devices, such as telematics in vehicles, which can lead to more personalized and cost-effective insurance policies.

🏭 Manufacturing

IoT devices connect machines and devices for efficient production. Sensors on factory equipment collect real-time data, enabling predictive maintenance to reduce downtime. This data-driven approach optimizes supply chain management, automates inventory tracking, and enhances the overall production efficiency of manufacturing companies.

🛍 Retail

The use of smart sensors and 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

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5 examples of IoT Apps

Google Home

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

The 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: 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

Amazon Alexa

One of the popular examples of IoT apps is Alexa, Amazon’s cloud-based voice service launched in 2014. Now it is available on Amazon-produced devices and third-party different devices. Amazon Alexa utilizes IoT technology and machine learning to enable voice-activated smart interactions with a user. 

When a user speaks to an Alexa device or a mobile application, the built-in microphones capture the voice command, which is then processed and sent to the cloud for analysis. In the cloud platforms, Amazon’s vast network of servers uses natural language processing and machine learning algorithms to interpret the requests.

IoT devices in the user’s environment, such as smart lights, thermostats, or low-energy sensors receive the instructions from the cloud and execute them. This seamless integration of IoT technology allows Alexa to control and connect with various smart devices, making it a central hub for home automation and voice-assisted tasks.

Screens of Alexa voice-assistant interface

Alexa App is available for iPhone and Android users


IFTTT, short for “If This, Then That,” is an IoT solution for automating and connecting various smart devices and services. Users create applets or custom rules that trigger actions based on specific conditions. IoT devices, like smart thermostats, motion sensors, or fitness trackers, generate data and signals that are processed through IFTTT’s IoT platform

When a predefined condition is met, such as reaching a specific temperature or completing a fitness goal, IFTTT coordinates the communication between different IoT services, and enables seamless integration. This allows users to orchestrate a wide array of IoT interactions, making their connected devices work together harmoniously for increased convenience and efficient customer experience.

Main display of United Wi-Fi connection service

American flight operator United uses the IFTTT platform

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 to provide a top-notch customized experience, you need to get familiar with your user. Ask for all the information you need: personal data, notification preferences, presence sensing, security, and privacy settings. Don’t forget to 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 from 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.

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Technologies and tools you need to create an IoT solution

The process of developing IoT applications requires various tools and technologies. Let’s take a look at these 5 levels of Internet of Things, IoT, architecture and discuss what they bring to the ecosystem.

Layer 5 to 1 of IoT architecture visualization

The multi-layered architecture of IoT system

Layer 1 consists of cloud applications to push and pull the data, or commands to and from IoT platforms.

Layer 2 is an IoT platform that connects every device in an ecosystem.

Layer 3 includes IoT protocols that are standardized communication rules. They enable IoT sensors and devices to transmit data.

Layer 4 is IoT gateways that act as intermediaries that bridge the gap between these devices and the broader network or cloud by translating and routing data.

Layer 5 includes IoT devices: sensors, actuators, and various endpoints that collect data or control physical objects. They can range from simple temperature sensors to complex industrial machines.

How to create an IoT app in 9 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 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 the key functions and specifications of the future IoT solution with the development team.

Step 2. Conduct market research

Start with looking at other solutions on the market for two main reasons: 

  1. To find references for your app;
  2. To identify the competitors and come up with a unique value proposition for your IoT product;

The market research will be a basis for defining project scope and prioritizing features during the development process.

Step 3. Find a development team

IoT app developers are not rare, but good and experienced IoT developers are quite uncommon. The thing is, the IoT industry requires a lot of skills: 

    • Knowledge of several programming languages;
    • Hardware knowledge;
    • UI (user interface) experience;
    • Data processing technologies;
    • Security protocols.

The list can go on and on. For tips on how to find a reliable partner for Internet of Things development services, check out our guide below.

Step 4. Choose tech stack

Firstly, we need to understand the specific requirements and constraints of IoT application development, such as the type of devices, data volume, and communication protocols. Next, we select appropriate hardware components, firmware, and communication protocols. 

Additionally, we choose a backend platform for data processing, storage, and analytics, as well as a front-end framework for user interfaces, which should align with the project’s scalability, security, and compatibility needs. Finally, we evaluate the long-term support and ecosystem of the chosen technologies to guarantee sustainability for future IoT application development and scaling up.

Step 5. Design the app

The 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 6. Develop an MVP

MVP, or minimum viable product, helps startup owners test the idea out 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 for the platform to provide planned services.

Step 7. Test security and performance

Development services include different types of tests to check how the IoT system handles different volumes of data and uneven loads. At this step, we want to make sure you release a ready-to-go and seamless solution to the market.

Step 8. 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 there’s no surprise that the most popular approach to this step is an in-app survey.

Step 9. 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 the budget you need to plan for each type of Internet of Things application.

🚨Disclaimer: This is our estimation for the development of 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 type Cost Timeline
Smart home $55,000 – $65,000 3 – 4 months
Retail $50,000 – $60,000 2 – 3 months
Telehealth $60,000 – $70,000 3 – 4 months
Wearables / Fitness trackers $47,000 – $57,000 2 – 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 that 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 app 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 app 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

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 IoT application 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: the 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.

See also  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 is that the hardware was from China. We had to solve a puzzle of why Chinese stations originally didn’t work with Russian SIM cards and how to change the IP of stations without any language knowledge.

See also  How we puzzled Chinese language out in a month and developed our first IoT project

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  • 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 key steps of IoT development?

    Plan your framework ➡ Design the app ➡ Develop an 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.