Cost of Outsourcing Mobile App Development: All Expenses Revealed

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09 Jul 2020
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13 min
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Oleksandr Sh.
Technical writer

Outsourcing software development is an arguable topic. Some entrepreneurs blindly believe that in-house development is better due to the constant control over the team. However, Statista claims that outsourcing services' global market size reached around $90 billion in 2019. On top of that, the report from Clutch states that 37% of overall outsourcing services occur in the IT field.

Table of contents

Large companies like Google, Slack, and Skype have been effectively using outsourcing for years. But what do businesses love the most about outsourcing software development? The price. In this post, we’re going to single out the main factors that influence the outsource app development cost and figure out developers' rates in different regions.

Factors that Influence Outsource App Development Cost

Software development is a complex process with numerous factors affecting the final price. It’s impossible to estimate the app development cost without looking into project requirements.

Here’s a quick list of the main factors that influence the price:

  • Complexity of features
  • Team members
  • Developers’ rate

Now, let’s take a closer look at each of these factors.

Features and Complexity

The complexity and development time of the whole project revolves around the features. The more time developers spend on each feature, the bigger will be the cost of outsourcing mobile app development.

To make it clear for you, let’s take a look at Netflix home page. On average, it takes around 15 hours to create a simple starting page for unregistered users. This is enough for an MVP (Minimum Viable Product) version of the product, but you have to make something more sophisticated to impress your users.

Now, let’s upgrade our home page with personalized features, like tracking users’ IP addresses and displaying movies that are popular within the user’s country. With these additions, humble 15 hours turned into an impressive 50 hours, increasing the outsource app development cost more than twice. Here's how Netflix's start screen looks like in the US:

Netflix starting page in the US

Starting page for unregistered users in the US

And that's how the same page looks like for users from Germany:

Starting page for unregistered users

Starting page for users from Germany

That’s why you have to think about each detail in your app beforehand. If you’re not sure that your users need certain features right after release, add them later. It’s often better to gather feedback in the first place and gradually modify your product based on it.

Development Team

The development process isn’t only about programming. Different specialists lay their hands on your product before the release. Given that talents are often the only expense in IT, the work of every specialist will add up to the total cost of outsourcing mobile app development.

Let’s single out each of the specialists involved and figure out their responsibilities.

Business Analysts

When you’re contacting an outsourcing software development company, business analysts will be the first to talk with you during the planning phase. Their task is to help you finalize project requirements, build an MVP feature list, and estimate the outsource app development cost.

In Ukraine, the main Eastern European outsourcing tech hub, business analysts earn $20,200/year on average. Business analysts from the US, California, earn $68,350/year.

Keeping these rates in mind, you can see that your project's initial stage will cost three times more in the USA than in Ukraine. By the way, software development companies from Ukraine offer free initial consultations and rough estimates.

Got a project idea?
Our business analysts can help you out with a feature list and rough estimate free of charge!

UI/UX Designers

Attractive app design is a large contribution to the app’s success. Misplaced buttons, wrong color palette, or even annoying loading screens may scare off new users. That’s why you need a professional UI/UX designer on a team. First off, they create wireframes showing you the structure of your app and layout of each screen. After that, designers create a complete UI/UX design according to the specifications given by business analysts.

The average designer salary in Ukraine is $12,300/year. Californian UI/UX designers, in their turn, earn $85,300/year. That's a colossal difference that once again highlights the benefits of outsourcing.

Project Manager

The closest friend of both the development team and the client. Project managers are mediators between the client and engineers during the development phase. They have to organize the working process, pass clients’ demands to the team, and ensure that the software will be delivered right on time.

On average, Ukrainian project managers earn $16,800/year. According to glassdoor.com, American PMs earn $66,100/year on average.

Android/iOS Developers

Developers are the core of the whole team. Programmers are responsible for the architecture and overall software performance. To create a full-fledged app equipped with complex features and flawless performance, developers have to be experienced with the project’s tech stack.

?

In this guide, you can read more on how to find the best developers for your project.

Usually, software engineers have the biggest salaries among the team members, so they influence the cost of outsourcing mobile app development the most. In Ukraine, the annual Android developers’ salary is $26,400/year for Java engineers and $24,000/year for Kotlin developers. In the USA, Java developers charge $79,200/year, Kotlin devs charge $83,000/year. As for iOS developers, in Ukraine, Swift engineers earn $27,000/year. In the US, their salary is $74,750/year.

Mind that depending on the complexity of your project, you may need several developers. Outsourcing companies allocate up to 10 developers per project.

QA Engineers

Quality assurance is necessary for every project. Bugs and vulnerabilities unnoticed by developers will ruin the user experience and even lead to data leaks. To avoid backfire, you should have a QA engineer on a team. The majority of outsourcing companies include testing services in the final cost of outsourcing mobile app development.

On average, QA engineers in Ukraine earn $18,000/year. In the US, their salaries reach $71,000/year.

We strongly recommend avoiding hiring freelancers for large projects. Typically, they don’t bother with serious quality assurance. Without proper testing, you’ll launch the product with bugs. On top of that, when the bug comes up, you’ll have to contact your developer once again and pay them more to fix the issue.

Developers’ Rate

As well as standalone programmers, software development companies also charge fixed rates for their services. Most often, the price range is the same within the same region. For example, Ukrainian software development companies charge $25-$50/hour.

The easiest way to calculate the cost of outsourcing mobile app development is to multiply the development time by the company’s rate. Let’s take a look at the prices for several projects.

Project Price Examples

Outsource app development cost may be different depending on the complexity and number of features. Now, we'll go through some project examples and figure out their price.

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Mind that the outsource app development cost depends on the number of platforms you’re building the project for. The project for iOS and Android will cost twice more than the Android-only project.

  • The Netflix-like app with integration of streaming algorithms, attractive design, and several payment gateways will take approximately 3,038 hours of development time. With the rate of $50/hour, the project for both iOS and Android will cost $151,900. In the case of cross-platform development, the time and price will be significantly lower, at around $83,545. By the way, this article explains how to build video-on-demand streaming services like Netflix and Disney+.
  • A basic e-commerce app with a catalog of goods, a cart, and payment gateways will take 2,500 hours. The cost of the development for both platforms will be $125,000. However, if you choose a cross-platform approach, the cost will be around $68,700. Learn more about e-commerce app development with this post.
  • An Uber-like app with GPS navigation, flexible choice of rides for passengers, and various payment methods will take 2,294 hours. Outsource app development cost will be around $114,700 for iOS and Android versions. Cross-platform development can reduce the price down to $63,000.
Cost of outsourcing mobile app development

Project prices with a rate of $25-49/hour

Cost to Outsource App Development by Regions

As we’re clear with the factors that impact outsource app development cost, it’s time to figure out how much developers from different regions charge for their services.

North America

North America is one of the most expensive regions to outsource mobile app development. In comparison with other areas, developers from the US and Canada earn more than in other regions. On average, companies charge $100-$150/hour. With this rate, the outsource app development cost of a Netflix-like project mentioned earlier will be $303,800-$455,700. That’s a tremendous price for an outsourcing project. That’s why a lot of companies prefer hiring developers with lower hourly rates.

Oceania

Oceania stands side by side with North America. With the rate of $100-$150/hour, the cost of outsourcing mobile app development skyrockets. A basic e-commerce mobile app will cost $250,000-$375,000. It makes sense to outsource to Oceania if you’re located in Australia or New Zealand. Thus, you’ll get more control over the development team. However, if you’re on a limited budget, it’s better to look at other regions. You can easily find the same quality at a lower price. Additionally, flights to Australia are expensive and time-consuming from almost any point in the world.

Eastern Europe

Eastern Europe is one of the biggest tech hubs in the world. Entrepreneurs favor this region due to the value for money it offers. With average rates of $25-$50/hour, the final outsource app development cost gets significantly lower. According to these rates, a complicated Uber-like project with custom features will cost you $133,100-266,200.

There’s a common misbelief that the price reflects the quality of services. However, that’s not true. With a number of 192,100, Ukraine holds its position among the top 10 countries by the number of professional developers. Besides, Ukrainian project managers are highly organized and always adjust meetings according to the client’s timetable. So, you’ll definitely find a dedicated team of developers that will build you a quality product for a fair outsource app development cost.

On top of that, it’s easy to arrange a meeting with the Eastern European team in person. For example, Ukraine is a visa-free country with a lot of flights for affordable prices. A direct, one-way ticket to Kyiv will cost you no more than $250 from any point in Europe. As for the US flights, a one-way ticket from San-Jose, CA, costs $746.

Why outsource software development to Europe?

Why outsource to Eastern Europe?

Western Europe

Western Europe is also rich with talented developers. However, depending on the country you choose, the price range varies from $50/hour to $150/hour. Such a wide range is caused by the number of developers in particular countries.

Germany, for example, has the biggest number of professional developers in the world, and their price range is $50-$99/hour. It’s a reasonable cost to outsource app development with a decent quality. However, Portugal has far less developers. Due to the lack of engineers, Portugal software development companies charge $150/hour. With such an inconsistent price range, a ridesharing app can cost $159,100 at $50/hour, as well as, $477,300 at $150/hour.

Asia

Probably, one of the most debatable outsourcing regions. A lot of entrepreneurs fall for the most attractive price range of $20-$49/hour. With this range, a Netflix-like app will cost only $60,760 - $148,862.

However, Asia is the case when outsource app development cost affects product quality. Asian timezone is very inconvenient for the majority of clients. For example, when it’s 12 a.m in Delhi, India, it’s only 2:30 a.m in Washington, DC, USA. Such a difference in time doesn’t allow conducting informative meetings with project managers. Besides, the language barrier and poor customer service may fail the whole project. That’s why you don’t have to fall for the lowest cost of outsourcing mobile app development. Firstly, you have to conduct your own research and find a trustworthy partner.

Project Price in Different Regions

Below you can find a table for a better understanding of the price difference in every region.

Comparison of project prices
Regions/project price Netflix-like app Ridesharing app E-commerce app Uber-like app

North America

$455,700

$477,300

$375,000

$798,600

Oceania

$446,586

$477,300

$375,000

$798,600

Eastern Europe

$151,900

$159,100

$125,000

$266,200

Western Europe

$303,800

$318,200

$250,000

$532,400

Asia

$148,860

$155,100

$123,800

$262,100

How to Make the Most out of Outsourcing?

Hiring a software development company is only half the battle. The team will handle issues related to architecture, design, and quality assurance. However, some concerns should be resolved by the product owner only. We’ve highlighted the main points that should be thought over before hiring a team of developers.

Market Analysis

This stage falls on your shoulders because no one, except the product owner, knows better the idea of the app. Your responsibility is to analyze the market to understand your idea's relevance and find out who your competitors are. Well-timed identification of business requirements results in the correct allocation of resources and decrease of the overall cost of outsourcing mobile app development.

Also, you have to think about the unique features of your app. For example, you’re going to develop an Uber-like app. If your app completely copies every Uber’s feature, then most likely no one will use it. What’s the point of using a no-name app when there’s another well-established one? However, if your app has some unique features, like ordering a bus for a large group of people, users may find your app useful.

Things to consider during market analysis

3 essential steps in market analysis

User Research

User research is another issue that has to be solved by the product owner. Your app depends on users. That’s why, before approving the design and feature list, you have to understand the demands of your audience. After the release, you have to constantly monitor user feedback and work towards user needs.

It’s a pity when a full-fledged application fails right after the launch due to the lack of interest from the audience. Careful entrepreneurs go for a minimum viable product first. It’d let you conduct user testing of your app and gather initial feedback for further upgrades for the minimal outsource app development cost.

On top of that, knowing your audience can help with a marketing strategy. For example, if you’re aiming at the audience between 18-23 years of age, you can try promoting your app in TikTok. In contrast, if you’re aiming at a mature audience you should go for LinkedIn.

Feature List

When contacting a software development company, you should have a clear understanding of your project's features. Business analysts can help clients with a feature list for the project’s MVP, but they are helpless when clients don’t have straightforward requirements for their product. Blurry product ideas will increase the analysis time and the final outsource app development cost.

?

Here’s everything you need to know about the project discovery phase and how it affects further development.

The feature list is the basis for the specification that’ll be passed to developers. So, if developers spend time on features that’ll eventually be useless, you’ll waste your funds for no reason. That’s why it’s crucial to have a precise feature list especially when you’re on a tight budget.

Why Outsource to Cleveroad?

Here, at Cleveroad, we know how to build products that matter. We provide full-cycle software development services. Right after the request, our business analysts will contact you to find out the project details. Our specialists will help you to come up with an MVP feature list and conduct a rough estimate free of charge.

Our development team delivered 200+ successful projects to clients around the world. We value each customer and arrange meetings at any time that is convenient for you. In 2019, we were ranked as one of the best software development companies for startups.

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