HOW MUCH DOES IT COST TO MAKE AN APP?

Explanation of cost. External factors

The most frequently asked question of young entrepreneurs: How much does it cost to make an app? 

Let’s so far leave an axiom “you get what you pay for” behind the scenes, and compare clear numbers. So. Something working costs 3000-150 000 USD if we are talking about worldwide labor market. If we are focusing on Ukraine only, and by an app, we mean mobile or a web app - it’s 6000 - 70 000 USD.  

As far as our specifics are mobile and web development and startups/SMB are 95% or our clients, we can state, that a working product with medium complexity will cost in total 20000-40000 USD, while simple applications with standard features and integrations cost 4000 - 18000 USD. 

Let’s make another dot on this coordinate system.  Due to the latest Clutch worldwide statistics, it costs 51000 USD to make a simple application. For a medium complexity, it’s the amount of 64000 USD, and a complex solution starts from 72000 USD and up to eternity. 


“High price= High quality” VS Reality


We always assume that the product we paid for shall have the best quality. At least for this price. But if we are talking about expensive software development - high price is high in comparison to what?

To an average local price? Or an Indonesian average cheque? Or expectations of an inexperienced entrepreneur? Or to the price of the competitors from the next-door office?

Thus, we listed the main factors that affect the price of more than 5%:

  • Geography and local tax system
  • Company margin and acquisition cost
  • Required balance of price, quality, and expertise
  • The uniqueness of a technical expertise
  • Whom you delegate the job (small or famous agency or consultant and his subcontract company, freelancer, a local team)

But let’s have a look at the specific numbers - worldwide hourly rates and tax percent.

Let’s take a React native development for example - a technology that allows creating mobile applications for iOS and Android simultaneously. So what does it cost in different countries?

hourlyrates

So what do we have?

  •  USA, Canada, Australia, Japan, and the UK are the most expensive regions due to high tax rates, and concentration os startups.
  • South America and Central Europe have almost the same hourly rates and taxation.
  • The price of  Indian outsourcing significantly grew over the last years - now it almost reached the level of Eastern Europe, and Ukraine, Belarus, and Hungary.
  • Indonesia VS USA has an 11x difference for one working hour.

What conclusion we can make from this?

The price is highly affected by the environment, demand, and competition.

At the same time, Quality depends on another set of factors. The human brain initially works equally regardless of a country. But there are some social factors that affect the average quality of the code:

  • % of engineers a country - how strong is the community
  • geography of clients
  • inner competition
  • level of salaries and respectively - requirements of the IT industry
  • level of English - ability to discuss tech solutions

Of course, code quality depends on a lot of other factors, such as development methodologies, toolset, usage of coding best practices, etc. but now we are discussing a macro situation, not the internal kitchen of each company.

Conclusion:

  • Some countries are expensive due to the external factors, not a code value itself.
  • Geosocial factors affect the price much more than any other factor.
  • You still get what you pay for, but always do research with 10-15 different options.