I agree with you, but I think the "overpriced" label still has real meaning for the high-margin products you mentioned. A company's ability to charge higher ma

I agree with you, but I think the "overpriced" label still has real meaning for the high-margin products you mentioned. A company's ability to charge higher margins can be for several reasons, whether they be legitimate competitive advantages: first to market, superior products, better marketing, better image, vertical-integration, etc. Or less legitimate/illegitimate: monopolies, oligopolies, collusion, anti-competitive practices, underpaid labor, etc. For SMS in particular, the only way they get away with charging so much is consumers don't have much choice in the matter, as all the major US carriers charge for SMS, and the cost is minimal to them for the reasons described in the link. Their justification for doing so then seems to fall on the less legitimate side of the scale. For Coke, since their value is based in some part on their recipe, you could argue their justification for their margins is, at least in part, due to the exclusivity and superiority of the product, rather simply relying on collusion or being a member of an oligopoly. This isn't to say that companies shouldn't charge whatever the market will pay, but charging high margins for the wrong reasons hurts the brand's image, erodes customer loyalty, and most importantly means they probably aren't innovating -- leading to more problems down the road. Apple's strategy vs. Microsoft's, $17 CD sales vs. $1 digital downloads, and iphone users lamenting being stuck on ATT (and possibly now switching to verizon) are all examples of this having an effect. That said, I doubt any startups are capable of or willing to rely on illegitimate methods to maintain high margins, I just wanted to argue that there can be negative consequences for existing companies who choose to do so without legitimate justification.