The price gaps depend on currency exchange rates, and the exchange rates can change rapidly. I worked in NZ, and I was paid in NZD, but the company sold their

The price gaps depend on currency exchange rates, and the exchange rates can change rapidly. I worked in NZ, and I was paid in NZD, but the company sold their products in USD. This meant the profit fluctuated. Dramatically. The exchange rate has moved from ~0.4 USD/NZD to ~0.85USD/NZD. Right now, it's sitting about 0.65, but you can see the problem. If you price something at 40c, it goes to 85c, you've got a problem. Even a 25% swing should be expected. A lot of these cost savings can be valid short term, but setting up a team (rather than a project) is a multi-year thing. Don't forget the currency risks. I have specific experience with this, where they attempted to outsource the engineering team to India. However, the exchange rate shifted, and the ROI disappeared. Two years of distraction and training our replacements gone. This can work well, it's why the Lord of the Rings movies were made. You have to know where your risks are, or you could find the developers that you thought were cheap all of a sudden aren't. Generally, it means you need to do it for some reason other than price.