> At no point in the ipod's history was it particularly innovative with its hardware in comparison to competing devices
When the iPod came out I remember the main competitor was the Creative Nomad Jukebox. It was bulky (it was the around the same size as a Sony discman), the screen was small, and it had like 11 weirdly shaped buttons, and I think had recharable AA batteries (that took like 12 hours to charge). It was awesome to have all those songs on there, but the thing was a chore to use.
The original iPod was Mac only but it was delightful to use, it fit in your pocket, had an innovative scrolling mechanic, and charged through the same wire as it used for data.
Of course marketing and harmony with iTunes helped a ton, but pound for pound the iPod was simply a better product even without those crutches.