There used to be plenty of room for innovation. General Magic made a PDA to compete with the Apple Newton Messagepad (the first "Personal Digital Assistant"). The Newton had a lovely pen-based user interface, and with the second revision, a handwriting recognition engine that worked perfectly. But sadly the early version failed to meet expectations (google "Beat Up Martin!") and Steve Jobs killed the project when he came back to Apple.

So both the General Magic and the Newton Messagepad sadly lost out to the inferior-in-nearly-aspect Palm. (curiously, Palm got its start writing an alternative alphabet interpreter for the Newton. So if not for Newton, Palm would have never been born, and would not have defeated Apple.)