Definitely. I'm working on something where a competitor is about half a year ahead, and I can clearly identify what parts of the app that others are using, and which parts are being ignored. To my surprise, one of the main features I thought my product would be good for went basically unused.

What the user wants is rarely the features, but some kind of solution. The solution isn't so clear from the feature. A primary feature of the iPhone is prestige, not calls, so looking good, being expensive, having a powerful camera is often more important than running smoothly or long battery life.

You can observe the competitor to see how people use it, read their reviews, see what people expect from it but aren't getting. Then make a better solution.

I'd also recommend getting to know your competitors well. If your product or their product fails, you could always work together.