Answered by Shaykh Faraz Rabbani
‘Are prayer beads an innovation?’
Shaykh Hajj Gibril:
Imâm al-Suyûtî recounted in one of his fatwas entitledal-Minha fîl-Sibha (“The Profit InDhikr-Beads”) the story of ‘Ikrima, who asked his teacher ‘Umar al-Mâlikî about dhikr-beads. The latter replied that he had also asked about it his teacher al-Hasan al-Basrî who replied: “Something we have used at the beginning of the road we are not desirous to leave at the end. I love to remember Allâh with my heart, my hand, and my tongue.” Al-Suyûtî comments: “And how should it be otherwise, when thedhikr-beads remind one of Allâh Most High, and a person seldom sees dhikr-beads except he remembers Allâh, which is among the greatest of its benefits.”  Abû Hurayra possessed a thread with two thousand knots and would not sleep until he had used it all for dhikr.  He said: “Verily, I make glorification (tasbîh) of Allâh Almighty everyday according to my ransom(qadardiyyatî), twelve thousand times.”  
Shaykh Faraz Rabbani:
The tasbih is a means to do dhikr. One should do dhikr in the way that is most conducive to actually doing dhikr, and to maintaining one’s presence of heart with Allah. The generally accepted fiqh principle is that, “Means take the ruling of their ends.” Interestingly, even Wahhabis (such as Shaykh Uthaymin (Allah have mercy on him)) apply this in some spheres.
The position of some Wahhabis that using prayer beads is a bida is a bid`a in itself. All the schools of Sunni Islam allow it. The greatest hadith experts, including giants like Imam al-Nawawi, Imam Ibn Hajar al-Asqalani, Imam Badr al-Din al-`Ayni, and others all explicitly permitted the use of prayer beads. The same applies to great Qur’anic exegetes. If these people did not understand the Qur’an and Sunna, then who did?
The prayer bead’s permissibility is explicitly mentioned in Imam al-Haskafi’s Durr al-Mukhtar, and in theHashiyas of Imam al-Tahtawi and Ibn Abidin. Imam Abd al-Hayy al-Lakhnawi has an excellent treatise on it, based on a shorter work by Imam al-Suyuti.
 Al-Suyûtî, al-Hâwî lîl-Fatâwâ. Cf. section on dhikr-beads in al-Shawkânî’s Nayl al-Awtâr (2:316-317) and Zakariyyâ al-Kandihlawî’s Hayât al-Sahâba. Albânî’s astounding claim that whoever carriesdhikr-beads in his hand to remember Allâh is misguided and innovating was refuted in Mahmûd Mamdûh’s Wusûl al-Tahânî bi Ithbât Sunniyyat al-Sibha wal-Radd ‘alâ al-Albânî (“The Alighting of Mutual Benefit and the Confirmation that Dhikr-Beads are a Sunna in Refutation of Albânî”). Another refutation was published by Hâmid Mirzâ Khân al-Firghânî al-Namnakânî in the seventh of hisal-Masâ’il al-Tis‘ (Madîna: Maktabat al-Îmân, 1985) p. 44-48.
 Narrated by Abû Nu‘aym in theHilya (1:383) and al-Dhahabî in the Siyar(Risâla ed. 2:623) and Tadhkira (1:35)
 Narrated by Abû Nu‘aym in theHilya (1:383), al-Bayhaqî in the Sunan (8:79), Ibn Hazm in al-Muh.allâ (10:396), Ibn al-Jawzî in Sifat al-Safwa (1:691), al-Dhahabî in theSiyar (Risâla ed. 2:610) and Tadhkirat al-Huffâz. (1:35), Ibn Rajab in Jâmi‘ al-‘Ulûm wal-Hikam, and Ibn Hajar in the Isâba(7:442) where he said that Ibn Sa‘d narrates it with a sound chain in his Tabaqât.