The enormous world of IT is transforming machines into life-like assets, leaving an impact on all. There are several devices developed today to make lives convenient.

Adding to it, we can’t resist making our lives easy, and according to Statista, we may witness an increase of 30.9 billion connected IoT devices in the next four years.

IoT projects in the past have failed due to a convoluted mesh of devices, networks, and applications connected. If developing a simple app was complex, imagine the extent of IoT solutions involving hardware and software engineering.

Where IoT solutions involve hardware and software engineering, the project managers lock horns with decoding the IoT budgeting. We have compiled the cost of embedded IoT solutions that includes every stage of IoT device development.

Well, embedded IoT solutions are broadly classified into areas like hardware, middleware, and software development. So, have a look into the detailed cost estimation of an embedded product.

Cost to Develop an Embedded IoT Product

If you are looking to create a custom IoT solution in your device, there are two things to consider, either you upgrade your device with sensors or design the machine from scratch. However, anything you choose comes with a cost.

We are very well aware that hardware development is the base of any device. Without hardware, you cannot upgrade the device with IoT applications. Building the base depends on the type, complexity, and functionality of the device, which may amount to nearly 80% of the total IoT development cost.

So, how much does it cost to build a custom hardware device?

Let’s dig into the process of hardware designing.

Custom Hardware Design Process


Elicit the technical requirements in this phase by discussing them with the stakeholders, hardware experts, and software engineers.

Industrial Design

Based on the requirements, create a PCB layout to visualize the image of the product. This schematic layout should meet the software requirements set in the previous step.


Firmware development services include the development of system architecture. They system architecture defines the driver design, component design, and mobility evaluation. Firmware is solely responsible for the power performance of an optimized embedded device.


A prototype is a workable model that helps to address functional issues and improve the quality to evaluate and test them before the final production.

Testing Automation

Various testing procedures are conducted to check the power integrity and user analysis. If any bug is detected, the prototype phase starts all over again. An IoT device development testing goes up to three-four iterations until you achieve the desired performance.

For example, complex home automation may cost the same as a simple wristband featuring physical activity.

Nonetheless, all the phases may go haywire if your product is not certified. As far as embedded IoT solution cost is concerned, certification plays a key role. Although the IoT protocols are different in each country, they usually encompass the following certifications.

Environmental and Safety- ROHS and energy star compliance are needed to ensure any overheating and electric shock hazards.

Communication protocols- Before claiming your gadget is Bluetooth compatible, check for Bluetooth SIG Qualification. Similarly, there are other communication protocols for Z- Wave, Zigbee, LoRaWAN, etc.

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Find the best hardware development company that helps you with the certification process. To know more about certification of the hardware device.

Next comes the network and middleware development.

Infrastructure – Network and Middleware

Middleware is a subclass of software that enables connectivity between two embedded devices. For your convenience, we have combined network and middleware application support under one category with its cost estimation.

Wireless Networks

Establishing wireless networks like LoRa, Bluetooth, Cellular, NFC, etc., are enabled for short-range and LPWAN for low power wide area range for IoT connectivity. The embedded IoT cost may fluctuate depending upon the connected gadgets.

Developing Embedded Software

Custom IoT devices may need a range from bare-metal firmware to full-fledged OS like Android or Linux. Developing embedded software may add to the IoT cost estimation.

You may also need middleware like drivers, APIs, SDKs connecting networks, and applications to communicate and incorporate third-party integration.

These solutions enable either between two devices, a device, and an app or two applications communication.

Data Storage Solutions

Here we talk about cloud-based solutions that organize and store data. Use a ready-made cloud platform or build a third-party application from scratch. Either way, you will get a robust support system for the embedded IoT solutions.

Once the second phase of IoT development solutions is completed, we finally land on the section -of software development. Let’s learn what falls under this category.

Software development

Embedded IoT cost estimation is incomplete without including the cost of integrating software into the IoT device. No IoT solution can run without software, and that of course incurs an operating cost.

Software development includes both front-end and back-end developers for performing simple to complex applications, including APIs, gateways, etc. There are a few factors that govern the cost estimation for an embedded IoT product.

  • The complexity of designing level
  • Level of embedded systems security needed
  • Types of the platform the app should work
  • OS like Linux, RTOS, Android
  • The size of the team required

All the above categories put together can give you the best solution for an embedded IoT device.

Read More: How to Select the Best Embedded Engineers Out of the Lot?


So, this was an overall understanding of the cost of embedded IoT solutions. Below we have bifurcated the estimated cost that incurs during the entire process of developing an embedded IoT device.

Hardware development Cost $20,000 to $100,000
Network & Middleware Cost $70,000
Software development Cost $40,000
Certification $10,000 to $100,000

With the rise of connected devices every year, IoT Software Development has become a part of every business. Users want access to the latest technologies and IoT solutions to simplify their lives. Industries like manufacturing, healthcare, security, automotive, education, and real estate are some of the hottest areas where one can explore and manufacture IoT devices.

Suppose you are willing to upgrade your embedded product to an IoT platform or develop a new IoT-enabled embedded device, you can seek help from the top product engineering companies in India. They can assist you with the best IoT solutions and their embedded development cost. It will be favorable if you look for companies that also provide certification.

Read More: Choose the Right Process for Embedded System Design


Why do we use embedded systems in IoT?

The embedded systems are unique computing system that runs in a single application. However, integrating embedded systems in IoT is essential if you need your device to connect with the internet and communicate through other networking devices.

Why do we need IoT?

IoT generates a massive amount of data that helps bridge the gap between devices and humans. The production of new IoT devices has reduced human intervention and provided a complete solution to every problem companies were facing. IoT helps in delivering large amounts of data in real time.

Is every IoT device an embedded system?

Yes, every embedded system connected to the internet is an IoT device. Some examples are monitoring devices like EHR systems, Medical equipment, industrial machines, smartphones, etc.

Paresh Sagar

Article By

Paresh Sagar

Paresh Sagar is the CEO of Excellent Webworld. He firmly believes in using technology to solve challenges. His dedication and attention to detail make him an expert in helping startups in different industries digitalize their businesses globally.