I won't reveal any secrets in answering the question, "how much does outsourcing app development cost?" If you've spent some time googling "outsource app development cost" or "how much does it cost to outsource app development?" I bet you know the approximate figures.
But you keep searching for something. And I suppose some of the questions are still open. If you want to know how to calculate the cost of outsourcing app development, how the price differ if you outsource the product development team and just outstaff a few developers – this article is just for you.
I'll show you how to calculate the price of your app, how the app development cost differs depending on the app type,the vendor's location, and the collaboration model (outsourcing & outstaffing).
Top Factors That Affect App Development Outsourcing Cost
If you've been searching for the outsource app development cost, chances are you found that the IT vendors don't offer a standard rate.
That’s because it isn’t possible to set a fixed figure. Various factors come into play when determining the cost of outsourcing mobile apps.
Geographic Location
It is a known fact that hiring IT developers in the US and Western European countries is costly. Furthermore, the talent pool in those countries is quite limited. If you’re outsourcing to a seasoned developer in the US, you’ll be charged at a rate of $135 per hour on average. Meanwhile, engaging a developer with similar skills in Ukraine will only cost you around $35- $55 per hour.
Outsource to India and you’ll be billed in the range of $15 - $40 per hour. In China, IT developers charge $25 an hour on average. While the lower outsourcing rates are indeed attractive, you’ll need to consider cultural and language differences when working with different countries.
App Type and Complexity
The second factor is the app itself. To calculate how much it takes to outsource app development, you should describe the type of the app and its functionality in detail. Here’s the cost breakdown based on the app complexity.
Purpose of development
Are you building an MVP or an early-stage Proof of Concept (PoC)? Depending on the features that are included in the app, you’ll be billed differently. An MVP, which has all of the basic features, will be more expensive than a simple PoC.
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Urgency
If you’re anticipating an exceptionally tight deadline, be prepared to pay more when outsourcing. The IT vendor needs to allocate extra resources to ensure that the app is developed within the shortened timeline.
Supported Platforms
Building a single platform app is cheaper than building an app that targets multiple platforms like iOS, Android, and web browsers.
Development Approach
The choice of native, mobile web, hybrid, or cross-platform development also affects the allocated resources, and thus the outsource app development cost. We, at Uptech, are big fans of React Native development because it speeds up the development process really a lot.
Complexity of UX/UI design
There’s a great difference between building an app like Whatsapp and a mobile game like Fortnite. The former has a clean and minimalist interface while the latter requires complex 3D modeling and a game engine. Therefore, expect a heftier price if you’re building an app that demands complex UX/UI.
Back-end infrastructure and connected APIs
Some apps may look simple on the phone, but they have a complicated backend infrastructure. For example, a VPN’s backend needs to encrypt and route data between multiple data centers, while the frontend is a simple app. As the complexity of the backend grows, so does the cost.
The same applies to the number of connected APIs. Apps that use an external payment gateway, mapping, streaming, geolocation, and other APIs are more costly to build.
Inclusion of additional branded visual elements
If you’re using branded visual properties in the add, you’ll need to fork out more for royalties or licensing fees.
How Does Outsourcing Collaboration Model Affect the App Development Cost?
The next thing I’d like to highlight is the outsourcing collaboration models. You may say why I can’t simply mention it in the previous block. And that’s a good question. The thing here is that the collaboration model highly depends on the project and your level of engagement. So as an entrepreneur, CEO, or product owner, you should clarify all the things from above first, and then choose a collaboration model that suits you and your project best.
At Uptech, we give flexibility to our clients and provide them with different types of collaboration models.
1. Fixed Price
With the fixed price model, we’ll operate strictly within the agreed budget and the scope of work, unless there is a force majeure.
For clients, the fixed price model offers fixed expectations on the potential expenses. However, it lacks flexibility where the client is still required to pay the fixed amount even if the scope is reduced during development.
Usually, we’ll implement the fixed price model only when there are an approved design and strict requirements from our clients. We don’t recommend startups to choose the fixed price model, as app requirements tend to change very quickly in the initial phase.
2. Time and Resources
There is more flexibility with this model. You only pay for the time and resources spent. This is ideal for startup owners as no fixed charges are imposed on our clients.
While this model supports the fast-changing requirements of a startup, it is a poor estimate of the final spending for the app development. Your expectations of how much a slight tweak in design may differ with the actual resources committed by our team.
However, Uptech will always provide an expected cost as a guideline.
Uptech note:
Fixed price and Time & resources models are the most common if you want to outstaff software development. It means that you hire a few developers, designers, or QAs to fill the needs of your project.
IT staffing is a very cost and time-effective technique, as you don't need to hire employees in-house, spend time and money on hiring and onboarding. You simply hire a developer or a designer on an outstaff basis, they help you develop a specific feature or pool of tasks, and you pay them for the time they spend on the task. No extra expenses and headaches. You scale your product fast with fewer expenses.
3. Dedicated team
In this model, we assigned a dedicated development team to develop your app. As a result, you’ll have better focus and fewer meetings compared to other outsourcing models.
However, you’ll be required to pay for the monthly salaries of the hired team. For example, we could be charging $45 for a developer. A month of service will cost $7,200 assuming that we’re allocating 160 hours of work per month.
It will be your responsibility to assign tasks and coordinate work with the team. Even if the team is idle, you’ll still need to pay the monthly salary for the agreed duration.
This model is recommended for mature startups or outstaff projects.
Uptech note:
Dedicated team model is more common for outsourcing software development. It’s suitable if you’re planning a long-term collaboration and need a whole product development team with Product Managers, developers, designers, QAs.
How To Calculate The Outsourcing App Development Cost?
Here's a step-by-step plan on how to calculate the cost of outsourcing app development:
- Make a list of features you want to include in your app;
- Decided if you want to build it for iOS and Android users or only on one platform;
- Should it be an MVP or a full-fledged product?
- What level of design do you expect to have? Prepare references if possible.
- What is your timeline and budget?
- Choose the IT vendor you want to work with and think of the collaboration model.
This is just a quick list of things that will help you come up with the approximate app development cost. Of course, if you need more precise figures, you can write to us about your project, and we'll make an estimation for you.
Average Mobile App Development Cost: Depending on the App Type
If you're about to outsource mobile app development, you probably want to know the approximate cost of the app in your industry. And that makes sense. Each app is unique, and the cost varies depending on each ingredient you put in your app.
Below, I gathered the most realistic but still average mobile app development cost by app industry type.
Why Outsource App Development to Uptech?
Uptech has a long-standing reputation of empowering startups and established businesses with programming outsourcing solutions. Our company is powered by a team of highly skilled multi-discipline IT experts. As far as programming tech is concerned, we're well-versed in popular languages and frameworks, including Kotlin, React, and Node.js.
We have been the preferred IT outsourcing solution for our clients throughout the years. We helped startups with developing the MVP to raise the next funding round. We developed apps for eCommerce companies like Dollar Shave Club, GOAT and worked with clients from the fintech industry, like Aspiration. After working with two big real-estate projects like Yaza and Nomad, we're experts in building apps in this niche.
What's more, at Uptech, we don't blindly develop your project, we treat it as our own. We propose new ideas and solutions to meet your business goals.
Summary
Like I’ve mentioned, it’s impossible to put an estimate on the app outsource development cost without going through the requirements. Also, you shouldn’t choose an IT vendor purely based on price. Track records, skills, team, and cultural similarity increases the likelihood of completing the app within or below your budget.
We’ve helped various clients in getting their apps developed and we believe we’ll be your ideal outsourcing partner.
Feel free to send us your app requirements for a better cost estimate.