This is only true of products with substitutes. The extreme example being commodities.

Pretty much any luxury brand has high product margins, but certainly not for lack of competition.

Exactly, and luxury brands are characterized by their electivity. While and appstore has formed to become something close to a virtual public good.

Google has basically the same profit margins with their Pixel phones compared to Apple and Android has 85% market share. Yeah you can sideload any app you want on your Android, but I've heard of no even half serious 3rd party competitors to the Play store. Not sure what the point is here.

What do you think of coffee?

That I can make it myself at home and it comes to around 10cents?

Or get it from a cafe, and value my time at around 2-3€ per cup