Sure, there are no completely innovative products. But the difference I see is this: going from a clunky, ugly, essentially business-only phone like the Blackberry to ubiquitous smart-phones is a more close to a difference in kind. Essentially, before the iPhone, most people did not believe they needed a smartphone. On the other hand, most people before Gmail did know that they need a mail provider, Gmail was 'just' a much more convenient mail provider. Most people did know they need a browser, Chrome was just much nicer. When Android rolled out, people already knew they want a smartphone, Android was cheaper and less walled-in.

A good example would be if Google's Stadia succeeds. Even though there have been attempts in the past (e.g. OnLive), the mind-share is so low that they are almost irrelevant. If Stadia gets anywhere near console-level market penetration, I would consider it an innovative product that Google created. I don't expect it to succeed, though, based on the track record.

> Essentially, before the iPhone, most people did not believe they needed a smartphone.

I think that's way overstating it. Long before iPhone people were asking for more software features out of their phones. Browsing, email, music, etc.

Even the touchscreen and the development model were things tried in the past with many attempts by various companies to make the PDA a success.

Apple did exactly what you say. They took a few ideas whose time had come, ideas that just happened to be in their wheel house from the work they did on iPod and presented them better than anyone had before.