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How Much Does Smart Home App Development Cost?

October 24, 2018 Written by Andrei Klubnikin, Senior Content Manager
As of 2018, Smart Home products are used by approximately 7.5% of households globally; in just four years, however, the penetration rate is expected to reach 20%, which makes Home Automation one of the most lucrative segments within the Internet of Things domain. Besides high-performance hardware, the Home Automation concept depends on software, including low-level solutions enabling device-to-device (D2D) communication, scalable infrastructure and mobile applications facilitating connected home configuration and management. How much does it cost to create apps supporting fault-free functioning of a Home Automation solution?

Smart Home Components & Connectivity Options

A Smart Home is a network of devices with built-in connectivity which make use of communication protocols to converse with each other and with the central hub and are operated via a mobile application. A Smart Home solution may be integrated with a voice assistant (Siri, Alexa, Google Assistant) to reduce friction in setting up and running IoT devices. Connected gadgets which utilize the same communication technology can be operated via one mobile application; otherwise middleware and separate mobile apps are required.
How much does it cost to build a Smart Home App?
There are two types of Smart Home solutions you can build — a wireless or a wired one.
Devices that comprise a wired Home Automation system employ protocols like X10 and Insteon to exchange messages over a standard or low-voltage power line, have unique IDs and embedded software running on them and act as self-sufficient nodes independent of the central hub and each other. The node-based architecture is what makes wired connected homes secure and reliable — but there are two sides to every coin. While you can easily scale a wireless Home Automation solution and add new devices to the network, wired Smart Homes lack flexibility and require complex wiring, which might significantly increase Smart Home installation costs. Wireless connected home systems can be powered by several communication protocols such as Z-Wave, ZigBee and Thread which are specifically designed to ensure low power consumption and data rates.
Having said that, the Smart Home market is largely fragmented, and most devices fail to talk to each other by design, so you need middleware to join the pieces of the puzzle together.

Understanding Smart Home Software Ecosystem

What we call a Smart Home app is in fact a multi-tier solution featuring:

  • Low-level software facilitating D2D connectivity, data acquisition and firmware updates.
  • Data analytics level, which features cloud-based or on-premises servers supporting data storage and processing.
  • Data presentation level, which features mobile and web applications enabling seamless Smart Home device configuration and management.
To provide a realistic Smart Home app development cost estimate, let’s assume you have hardware — i.e., sensors, Home Automation controls, thermostats, smart speakers and other devices with baked-in connectivity — and embedded software pre-installed by the gadgets’ OEMs.
How much does it cost to create a connected home platform which would allow homeowners to operate these devices in sync?

Smart Home app development projects often involve the integration with new APIs, software libraries and hardware solutions and are therefore considered innovative.

Smart Home App Development Cost Breakdown

Back-end System for Data Acquisition, Storage & Analytics

With the greater availability of cloud-based infrastructure solutions including AWS IoT and Azure IoT hub, Smart Home start-ups no longer have to code advanced data acquisition, archiving and analytics modules from scratch. Amazon, for instance, provides an entire suite of services which allow developers to integrate connectivity into hardware, design scalable Home Automation solutions and apply advanced Machine Learning algorithms while conducting sensor data analysis.
Nevertheless, the business logic of a Smart Home app still has to be written from the ground up.

Functionality-wise, the key components of a connected home back-end system include:

  • Data analytics module with reinforcement learning capabilities which enables the Home Automation system to make autonomous decisions based on historical and real-time data — for instance, lower the thermostat at certain hours of the day or turn the lights on once motion sensors spot activity in the room.
  • Provisioning module — that is, a web-based suite which allows customers who buy connected home products to set up a user profile, add devices to their network by scanning a QR code or registering a gadget’s unique serial number and enable automatic firmware updates.
  • Basic admin interface, which allows you as a Smart Home service provider to manage your customer base and device network, roll out security patches, etc.
  • APIs facilitating secure integration with connected home gadgets, central hub, mobile devices and 3rd-party Home Automation products.
The development of a fully fledged back-end system for a custom Smart Home software solution featuring the modules listed above will cost you $200 thousand.
Have any questions? Ask our team!

Mobile Applications for Smart Home Device Management

Although pairing a Wi-Fi enabled device to a mobile application does not necessarily makes a connected home intelligent and may in fact cause inconvenience, the current level of Artificial Intelligence development prevents IoT start-ups from designing Smart Home system which expedite data-driven decisions with no involvement on a user’s part.

A Smart Home mobile app features several components:

  • Lighting management module, which allows users to control connected bulbs, light strips and accessories remotely.
  • Climate control module, which supports effortless set-up and management of HVAC equipment.
  • User control module, which enables homeowners to restrict access to Smart Home settings, add new users to the network and create custom schedules.
  • Media & entertainment suite designed to help users orchestrate smart TVs, audio systems and connected speakers.
As you’re probably targeting both iOS and Android users, you’ll need approximately $100 thousand to create dedicated mobile apps for your Smart Home system. It is also recommended that you develop a web-based application mirroring the functionality of the smartphone apps, which adds another $50 thousand to the estimate.

How Much does It Cost to Create a Smart Home App?

In the end, we’ve arrived at an impressive figure — $350 thousand. Mind that the features we’ve enumerated above are the absolute minimum required to ensure your connected home system’s success in the competitive market.
The integration with a voice assistant — for example, Amazon Alexa, a program with advanced NLP capabilities which gets Siri, Google Assistant and Cortana beat by a mile — would certainly introduce a new level of convenience for your customers and bring you one step closer to configuration-less Home Automation. Depending on the amount of devices within a connected home network and the number of commands the assistant is supposed to interpret, the implementation of this feature will cost you at least $20 thousand.
Breaking down Smart Home application development costs a bit further, it’s worth mentioning that HVAC management is the most expensive and time-demanding task on our estimate and will consume up to 50% of your budget (back-end and mobile combined). Media and entertainment management functionality is a runner-up with $120-130 thousand, while smart lighting — $100 thousand — is at the bottom of the list.
It should be noted that Smart Home projects often involve the integration with new gadgets, services and APIs and are therefore considered innovative. In order to get more accurate app development estimates, do not hesitate to discuss your project with our expert team!

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