In most settings, magic is essentially a physical force or part of the laws of nature. The divide would actually be between magic using machines and non-magical machines.
Remember back in the 50s when there were all those pictures with nuclear powered cars and refridgerators? It sounded like a good idea at the time, but it turned out that radioactivity has all kinds of limitations and drawbacks that make such applications economically prohibitive.
Only because you can do something with magic doesn't mean that magic is the most economical solution. You could convert a water mill to magic so it doesn't need any running water to turn the wheel anymore. But that will cost you and might cost a lot more than simply transporting the grain to the river and back to the town once its ground.
If you have a level of technology that gets slightly industrialized, you could add the complicating factor that magic doesn't really stick to everything equally well. You could enchant a wooden mill to run by itself, but the enchantment might only stick for weeks or even days before it needs to be renewed. If you need an alloy of high quality steel and silver for the spell to last for years, building such a mill might be very expensive both in building and maintenance and that is even before you count all the additional costs for making the magic lasting for more than a few minutes.
In some cases magic would be just too useful not to use it, like using magic mirrors for communication rather than sending a messenger on a four day trip. But that would be for the highest level of government and industry only.
The option to use the pony express didn't mean that normal post service wasn't used. Pony express was much quicker, but you had to pay quite hefty for it.
In the kind of settings I run, magic simply doesn't have the ability to do the things that would otherwise be done by technology. You can go into a trance to commune with a spirit, but you can't do the same thing to call your aunt. Or you could make vines grow from the ground and cover a cave entrance, but you can't make them into sturdy walls for a building that will stay in place and carry the weight of the roof and upper floors.
Also, magic requires a lot of education. In the modern world, almost every person is mentally able to learn latin, greek, sanskrit and ancient chinese, get a degree in law and economics, and find a well paid job. But most people don't because they don't have access to such education. Sure, all lawyers and managers can easily say "I lay down my work for a few years and live in humble conditions from the wages I saved, so I can educate poor kids to understand the law and how to become businessmen. Out of my love for all mankind."
But they don't. And in the same way wizards and priests would not just take everyone who comes to their door wanting education, lodging, and free food. If you want to get in, you have to pay the tuition fees and cover the expenses for lodging. Magic isn't taught out of charity, but as a commercial service. And those who can cast magic also are not really that interested that there are more people who can do it, which would make the fees for the casting of spells to fall.