Apple stole the idea and patent from Creative Labs to make an mp3 player. Creative Labs has pioneered the mp3 player with it's ZEN Mp3 Player, then Apple came along and stole from Creative. Apple and Creative Labs sued each other. This is another example of Apple's unfair dominance allowing the Creative ZEN to be forgotten about. The Creative ZEN had features that the iPod didn't have making it a better mp3 player and it had no restrictions allowing you to download mp3's from anywhere wereas the iPod restricted to iTunes. This is the reason I hate Apple with their products dominating the market and competitors don't get the same attention as Apple.
I admit that I'm not well studied on the details of that case, but I am familiar with patent law. If Creative had patent protection on the ZEN, then Apple must have found a way around it without violating Creative's patent (at least in the court's eyes, even if Creative disagreed). This could relate to the very reduction in features you described.
Otherwise, at Creative's choice, Apple would have had to either pay Creative to license their patent or vacate the market and pay Creative damages for lost sales.
When companies win market share under fair competition, that's how it's supposed to work. It's not "unfair dominance;" it's exactly proper and earned dominance. Just because I may have preferred Windows Phone to iPhone or Android (and I preferred the Palm Pre to all of them), or you may have preferred the ZEN to the iPod, that doesn't entitle our pet products to market victory. We were obviously in the minority in our preferences, hence their failure to capture enough interest in the broader market to survive.