Outsourcing software development is often a debated topic. While some entrepreneurs believe in-house development is superior due to tighter team control, data tells a different story. According to Grand View Research, the global market for outsourcing services reached approximately $261.9 billion in 2022. Additionally, Zippia reports that 37% of IT department tasks are outsourced, with nearly 59% of businesses opting for outsourcing due to its cost-effectiveness.
Major companies like Google, Slack, and Skype have been leveraging outsourcing for years. But what draws businesses to outsourcing the most? The price. Here are some approximate costs for outsourcing mobile app development at a rate of $50/hour for both iOS and Android:
- Simple apps: $40,000–120,000
- Medium-complexity apps: $120,000–200,000
- Complex apps: $200,000–300,000+
There’s also a straightforward way to reduce your development budget: opt for cross-platform development. Frameworks like Flutter enable developers to create a single application that runs on multiple platforms simultaneously. This approach can reduce outsourcing costs by up to 60% compared to building separate native apps for iOS and Android.
As you can see, it’s challenging to provide an exact cost without diving into specific project details. In this post, we’ll explore the key factors that influence outsourced app development costs and review developer rates across different regions.
Factors that Influence Outsource App Development Cost
Software development is a complex process with numerous factors affecting the final price. Estimating the app development cost without analysing the project requirements is impossible.
Here’s a quick list of the main factors influencing the price:
- Complexity of features
- Team members
- Developers’ rate
Features and Complexity
The overall cost and development time for an app are heavily influenced by its features. The more time developers spend creating and refining features, the higher the cost of outsourcing mobile app development will be.
For instance, consider the Netflix homepage:
- A simple starting page for unregistered users takes about 15 hours to develop. This is suitable for a Minimum Viable Product (MVP).
- However, adding personalised features—like tracking users’ IP addresses to display popular movies within their country—turns 15 hours into 50 hours, more than doubling the development cost.
This demonstrates why careful consideration of features is essential before development begins. If you’re unsure whether certain features are necessary immediately, it’s often wiser to launch with a simpler version and gather user feedback. Based on this feedback, you can gradually enhance your app by adding features over time.
Development Team
The app development process involves more than just programming. A range of specialists contribute to your product before its release. Since talent is often the primary expense in IT, the work of each team member adds to the total cost of outsourcing mobile app development.
Let’s break down the roles and responsibilities of the key specialists involved:
Business Analysts
Business analysts are your first point of contact when engaging with an outsourcing software development company. During the planning phase, they help you:
- Finalise project requirements.
- Build an MVP feature list.
- Estimate the software development cost.
Salaries Comparison
- Estonia (EU): $20,200/year
- USA (California): $68,350/year
This means the planning phase of your project could cost three times more in the USA than in Estonia. Notably, many Estonian software development companies provide free initial consultations and rough estimates.
UI/UX Designers
A well-designed app is crucial for success. Poorly placed buttons, an unattractive colour palette, or frustrating loading screens can drive users away. This is where UI/UX designers come in.
Their tasks include:
- Creating wireframes to showcase the app’s structure and layout.
- Designing a complete UI/UX experience based on specifications provided by business analysts.
Salaries Comparison
- Estonia (EU): $19,300/year
- USA (California): $85,300/year
The stark difference in salaries highlights the cost-saving potential of outsourcing to regions like Estonia.
Project Managers
Project managers act as a bridge between clients and the development team. Their responsibilities include:
- Organising the workflow.
- Communicating client requirements to the engineers.
- Ensuring timely delivery of the software.
Salaries Comparison
- Estonia (EU): $22,800/year
- USA (California): $66,100/year
Android/iOS Developers
Developers are the backbone of any app development team. They are responsible for the architecture and overall software performance. To create a feature-rich app with seamless functionality, developers must have expertise in the relevant tech stack.
Developers typically have the highest salaries on the team, which significantly impacts the cost of outsourcing app development.
Salaries Comparison
- Android Developers in Estonia:
- Java Engineers: $26,400/year
- Kotlin Developers: $24,000/year
- Android Developers in the USA:
- Java Engineers: $79,200/year
- Kotlin Developers: $83,000/year
- iOS Developers:
- Estonia (Swift Engineers): $27,000/year
- USA (Swift Engineers): $74,750/year
The complexity of your project may require multiple developers. Outsourcing companies often allocate up to 10 developers per project to ensure timely delivery.
QA Engineers
Quality assurance (QA) is a critical part of any development project. Bugs and vulnerabilities missed during development can negatively impact user experience and even lead to serious data breaches. Having a QA engineer on your team ensures that your app is tested thoroughly before launch.
Salaries Comparison
- QA Engineers in Estonia: $18,000/year
- QA Engineers in the USA: $71,000/year
Most outsourcing companies include testing services in their final app development costs, ensuring the product is launched with minimal issues.
Why Avoid Freelancers for Large Projects?
Freelancers often skip rigorous quality assurance, which can result in launching a product with bugs. Fixing these issues later means additional costs and delays. For large projects, it’s better to rely on outsourcing companies that prioritise thorough QA processes.
Developers’ Rate
In addition to individual programmers, software development companies charge fixed hourly rates for their services. Rates are generally consistent within the same region. For instance, software development companies in Estonia typically charge $40–$65 per hour.
To calculate the cost of outsourcing mobile app development, multiply the development time by the company’s rate. Below are some project examples to illustrate the costs involved.
Project Price Examples
The cost of outsourcing mobile app development varies depending on the complexity and number of features. Additionally, the number of platforms (iOS, Android, or both) significantly impacts the price. Developing for both platforms will cost nearly twice as much as building for just one, while cross-platform development can help reduce costs.
1. Netflix-Like App
A Netflix-like app with streaming algorithms, an attractive design, and multiple payment gateways requires approximately 3,038 hours of development.
- Native Development (iOS & Android): $155,000 at a $50/hour rate.
- Cross-Platform Development: $80,000
2. Basic E-Commerce App
An e-commerce app with a product catalog, cart, and payment gateways takes around 2,500 hours to develop.
- Native Development (iOS & Android): $120,000 for a medium complexity product.
- Cross-Platform Development: $68,700
3. Uber-Like App
An Uber-like app featuring GPS navigation, ride options, and multiple payment methods requires approximately 2,294 hours of development.
- Native Development (iOS & Android): $120,000 for a mid-complexity version.
- Cross-Platform Development: $63,000
Types of Outsourcing Cooperation Models
When outsourcing mobile app development, the type of cooperation model you choose will significantly impact costs and workflow.
Location-Based Models
Location plays a critical role in effective communication with your development team. Selecting the right location-based model can help minimise challenges related to time zones or cultural differences. Here are the three primary models:
- Offshore Outsourcing: Collaborating with an IT company located in a distant region.
- Nearshore Outsourcing: Working with developers based in neighbouring or nearby countries.
- Onshore Outsourcing: Partnering with developers from within your own country.
Relationship-Based Models
Choosing the appropriate cooperation strategy is equally important for defining processes, roles, and costs in your project. Below are three common relationship-based models:
- Staff Augmentation:
- Temporarily expand your team by outsourcing additional specialists.
- Payment is based on 8 working hours per day multiplied by their hourly rates.
- Dedicated Team:
- Delegate specific tasks to a team of specialists working independently according to your requirements.
- These professionals are hired on a long-term basis and paid for 8 hours daily at their hourly rates.
- Project-Based Model:
- Delegate the entire project to an outsourcing company.
- Payment is calculated by multiplying the time required to complete the project (or a specific part) by the vendor’s hourly rate.
Cost to Outsource App Development by Regions
The cost of outsourcing app development varies significantly by region, depending on local rates and market conditions. Here’s an overview of how costs differ across the globe and what factors to consider when selecting a development team.
North America
North America is one of the most expensive regions for outsourcing mobile app development. Developers in the US and Canada typically charge $100–$150 per hour, making this region a premium choice. For instance, a Netflix-like project could cost between $303,800 and $455,700. While this ensures high-quality work, the steep price encourages many businesses to explore more cost-effective options in other regions.
Oceania
Oceania, which includes Australia and New Zealand, stands alongside North America in terms of cost. With hourly rates also averaging $100–$150, developing a basic e-commerce app in this region could cost between $250,000 and $375,000. Outsourcing to Oceania can be advantageous for businesses based there, offering better control over the development process. However, companies with limited budgets may find it more economical to consider other regions that provide similar quality at a lower price. Additionally, the geographic remoteness of Oceania makes travel expensive and time-consuming for international clients.
Eastern and Central Europe
Eastern and Central Europe is a popular outsourcing destination due to its excellent value for money. Hourly rates average between $40 and $55, significantly lowering the overall cost of projects. For example, a complex Uber-like app with custom features would cost approximately $200,000–$300,000. Estonia, in particular, stands out as a top tech hub, boasting a large number of skilled developers and highly organised project managers. Meetings with teams in this region are also easy to arrange, with affordable flight options within Europe and reasonable ticket prices from the US.
Western Europe
Western Europe offers a mix of pricing and talent levels, with rates ranging from $50 to $150 per hour. For example, Germany, home to one of the world’s largest developer pools, has rates between $50 and $99 per hour, providing a balance of cost and quality. In contrast, countries like Portugal, with fewer developers, charge higher rates—up to $150 per hour. This wide range means that a ridesharing app could cost anywhere between $159,100 and $477,300, depending on the country and hourly rate.
Asia
Asia is often considered one of the most affordable regions for outsourcing app development, with hourly rates ranging from $20 to $49. A Netflix-like app developed in Asia could cost as little as $60,760–$148,862. However, lower prices can sometimes come with trade-offs in terms of quality. Challenges include significant time zone differences (e.g., a 10.5-hour gap between Delhi and Washington, DC), potential language barriers, and inconsistent customer service. While Asia’s lower rates are appealing, it’s crucial to research and select a reliable partner to avoid potential pitfalls.
How to Maximise the Benefits of Outsourcing
Hiring a software development company is only part of the process. While the development team manages architecture, design, and quality assurance, certain responsibilities fall solely on the product owner. Here are the key considerations to address before engaging with a team of developers.
Conduct Market Analysis
As the product owner, you are best positioned to assess the viability of your app idea. A thorough market analysis helps you understand the relevance of your concept and identify competitors. Accurately defining business requirements at this stage ensures resources are allocated effectively, reducing the overall cost of outsourcing mobile app development.
It’s also crucial to pinpoint unique features for your app. For example, developing an Uber-like app that simply replicates Uber’s features may fail to attract users. However, an app offering unique functionality—such as the ability to order a bus for large groups—could stand out in the market.
Understand Your Users
User research is another critical responsibility of the product owner. Since the success of your app depends on its users, you must understand their needs before finalising the design and feature list. Post-launch, it’s vital to monitor feedback and adapt your app to meet user demands.
Launching a Minimum Viable Product (MVP) is a cost-effective way to test your app with users and gather initial feedback for future improvements. Additionally, knowing your audience informs your marketing strategy. For example, if targeting 18-23-year-olds, TikTok may be an effective platform, whereas LinkedIn is more suitable for a mature audience.
Choose the Right Outsourcing Partner
Finding a reliable and competent outsourcing provider is essential. Consider running a small test project to evaluate their capabilities. Clearly define your project’s goals to ensure the chosen team has the technical expertise to meet your requirements.
Protect Your Intellectual Property
Safeguarding your intellectual property is a crucial step in creating a unique product. Signing a non-disclosure agreement (NDA) with your vendor can prevent confidential information from being shared with third parties and protect your project from potential risks.
Establish a Clear Communication Strategy
Working with an outsourcing company means collaborating with a remote team, making transparent communication critical. Set clear expectations for project goals, deadlines, and costs from the outset.
Regular check-ins are vital to track progress and address any issues early. For instance, weekly meetings—scheduled at a convenient time—help ensure transparency and allow for corrective actions if needed.
Define a Precise Feature List
When engaging with a software development company, you should have a well-defined list of features for your project. While business analysts can assist in creating an MVP feature list, unclear product requirements can prolong the analysis phase and increase costs.
The feature list serves as the foundation for the project specifications provided to developers. If developers work on unnecessary features, you risk wasting time and resources. A precise feature list is especially critical when working with a tight budget.
Why Outsource to EZtek Software?
EZtek Software is a professional mobile and web development vendor located in the heart of Vietnam. Since 2011, we have been delivering tailored software solutions that empower businesses to innovate, streamline workflows, and outpace competitors.
EZtek in Numbers
- 10+ years of market experience
- 120+ in-house engineers
- 170+ successful projects delivered
- Expertise spanning 8+ industries
Our portfolio showcases a wide array of custom-built projects that help businesses achieve new milestones and maintain a competitive edge. Let us share an example of how we successfully implemented a project for one of our US-based clients.
A Successful Partnership in Healthcare Education
Our client, a US-based company, provides online educational and training programs for medical students. However, their existing platform, built on WordPress, was outdated and lacked the flexibility to meet user needs. They required an experienced technical partner to:
- Develop an e-learning platform with robust LMS functionality for delivering certified healthcare training.
- Create a user-friendly, visually appealing online environment to transition users seamlessly from the old platform.
- Provide long-term technical support to keep the LMS competitive in the saturated healthcare education market.
The Outcome
EZtek Software delivered a modern, feature-rich healthcare e-learning solution tailored to the client’s requirements. The platform enabled the company to offer professional training services that meet students’ needs, including preparation for industry certifications.
Our client benefited from:
- A rapid, interruption-free launch.
- Enhanced user loyalty through an intuitive and effective platform.
- A growing user base, with over 350,000 future nurses now relying on the platform for their educational needs.
How We Work at EZtek Software
At EZtek, we specialise in full-cycle software development services. As soon as we receive a request, our business analysts will reach out to discuss your project details. We assist in defining your MVP feature list and provide a rough cost estimate—free of charge.
With years of expertise and a proven track record, EZtek Software is here to help you build software solutions that truly matter.
