No, it became the market leader by ignoring the feature race and creating a device that was usable by "normal people." It wasn't the samllest, or the biggest screen, or the most storage, but Apple grew the market to include everyone, not just gadget freaks.
The clickwheel and iTunes sofware were part of the equation, and the iTunes store was the other. If I had told you nine years ago that your nontechnical family members would soon be downloading music from the internet and playing it on their portable device, would you have believed it? Would any amount of marking have gotten them to use a Diamond Rio and MusicMatch?
Didn't the iPod rise to market leader have far more to do with marketing than any performance merit?