Mobile app pricing – A comparative study.
- Mar 17, 2016
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A lot is talked about the disparity in the way app development companies price themselves. Yes, there are the obvious reasons why some are more expensive that others – experience, technology, company size, etc. But there’s a lot more to be considered when it comes to mobile app pricing. App development markets are very different in different parts of the world. No two places have the exact same kind of customers. Their expectations and budgets will always differ and accordingly the teams to meet this demand will also be different.
ContractIQ publishes an annual study on new technology and mobile app pricing trends in development called the Makers’ Speak Report. You can download your copy here. To fully understand the reason behind the pricing figures given in that report and put that knowledge to good use, we need to dig a little deeper into the markets in various parts of the world and the way app businesses and other organisations work with outsourced teams.
Note – all prices mentioned in this article are per hour rates.
The reason Apple doesn’t produce iphones in the United States is the same as clients from North America who look for cheaper outsourcing options in Asia, Eastern Europe, etc. Outsourcing has always been an expensive proposition in this region. Firms look at various options while outsourcing to companies in the US. For example, they have them do only design and front end while the back end is developed by a team offshore. Sometimes, the project managers alone may be on site with other devs being offshore. Resources here bill anywhere between $60 – $175. For clients and projects that demand presence of a resource on site, outsourcing to US teams is still a better option despite the price.
App development firms here have very efficiently carved out their market by serving clients in the US and other neighbouring countries. This can be attributed to the fact that the timezones are suitable for these teams to work with US clients as compared to Asian teams. Dev. teams in Argentina claim nearly 85% of their clients to be from the US. The range here is between $15-$60. This region sees a lot of hard working small to mid size(20-80 member) teams which work with both startups and large organisations.
According to a report from 2013, nearly 22% revenue generated from app related products and businesses was from the European Union. As you might see from the pricing chart, we’ve specified a $20-$70 range in Central and Eastern Europe and $40-$140 range in Western Europe. Eastern Europe is a much sought-after market, for both European & American clients. Poland & Ukraine lead the way, with some great teams available in Belarus & Estonia. The strength of this market is value for money. Great talent at affordable prices.
UK rates are much like the ones in US($60-$170). A costly proposition for early stage startups from the UK itself. Again, founders who are bootstrapping are better off working with dev. Teams outside the UK or going in for a blended development model. Here the UK team takes care of only project management or has some resources offshore where they use different billing rates. Many UK based firms have offshore teams in India & EE.
The above Urban Dictionary definition of the phrase ‘bangalored’ reminds us that India has always been and always will be one of the hottest destinations for IT outsourcing. With cheap and highly skilled resources, Indian firms have always been able to provide development services at a third or even a quarter of what it costs to do the same in the US. App development teams here have quickly sprung up in great numbers and capitalized on the increasing demand in the local and international market. Resources are priced anywhere between $15-$55. Indian dev shops still remain the best choice for Indian startups, organisations and many customers outside India. Many of these firms are also expanding by having offices in locations such as US, UK, Europe to attract more customers. Some of them even have project managers or other resources stationed there, apart from sales staff.
South East Asia:
Some of the countries here offer the cheapest resources in the world. For as low as $12, you could hire a developer from Indonesia or Vietnam. Dev shops outside this region who work on the offshore outsourcing model have been known to sub contract developers here. The availability of such cheap developers is largely consistent across this region except Singapore. Being at the other end of this spectrum, high quality teams here can bill as much as $120. If you’re looking to outsource to South-East Asia, it’s better to get a few things checked out before regretting it later. $15 does give a ‘bang for your buck’ feeling but it is imperative to make sure that the project manager or sales staff you speak to are effective in communication. Verifying their experience level on projects and exposure to relevant technologies is also needed.
Africa is an emerging app market where innovation is fueled by necessity, many of the apps being developed here are aimed at making the lives of Africans easier. Cheap resources are available here for $15-$30 but there are better teams available outside this region.
Australian firms do high quality work and are pricey, falling anywhere between $60-$120. Due to the odd time zone in which Aussies find themselves in, these teams don’t attract a lot of customers from overseas.
There is something in every region which would work for a given customer. Price isn’t the only factor which decides which team is the best fit. Other factors such as past experience, business savviness, compatible work timings, communication skills and the know how of using the relevant tech stack also need to be taken into account. Make sure you consider all this while choosing your team.
Author Bio: Pravir Ramasundaram is our content writer here at ContractIQ. Keep dropping by to read more by him about mobility and outsourcing.