Against using Nomad a strong counterexample: they were almost certainly developing the device before the Nomad came out, so they might have been innovative in the sense that they were working on a device that
they hadn’t seen before.
In my recollection, though, a bigger hard drive did not really feel like an innovation. It might have just been that I was a kid, but my music library was not so huge, and it was possible to reduce the file sizes anyway (especially given how crappy ear buds were at the time, and anyway, how good was the dac in a cheap mp3 player at the time?).
We were used to the idea that hard drive sizes might make a big jump anyway, it was still the era of dramatic leaps and bounds.
Finally, you probably had a binder full of CDs anyway (burned CDs if you were cool of course), so you could play them in a car. So, the concept of having much more “drive space” in some sense was not at all new. (And the UI of a binder full of CDs is much more intuitive than any MP3 player!).
Rather, the iPod didn’t really have any big new ideas. It’s just that nothing about it sucked. The hard drive was pretty big, the UI was good enough, the clickey wheel thing was fun, the audio quality was fine. No new ideas, B+ all around, and nothing to make you want to given up on it.