A lack of groundbreaking innovation leads to commoditization, not the other way around. A commoditized market is ripe for new innovation to set an offering apart—and if that innovation is big enough, it may just end up creating a new market.
The feature phone market was pretty commoditized, but that didn't stop people from trying to figure out ways to create a new, less-commoditized, market by making phones smarter. And touch-based smartphones, too, will become increasingly commoditized until someone comes up with another revolution.
Similarly, the basic functionality of a car has been commoditized for decades, but competition keeps innovation going.
The feature phone market was pretty commoditized, but that didn't stop people from trying to figure out ways to create a new, less-commoditized, market by making phones smarter. And touch-based smartphones, too, will become increasingly commoditized until someone comes up with another revolution.
Similarly, the basic functionality of a car has been commoditized for decades, but competition keeps innovation going.