I am no apple fan but I have to admit where they did some revolutionary things in the past decade. The iphone was thinner with a better screen and better tech than anything anyone had seen, but furthermore it was just as much "form" as it was "function". Nobody else had anything even close to compete with it in terms of a "modern day" smartphone. Then the ipod touch was very innovative, using a full touch interface on an MP3 player. Then the ipad, which was thinner and lighter than anyone thought possible at the time, outside of sci-fi movies. Not only that, but they were using status as a marketing philosophy, and it changed the way people looked at personal electronics
Very little of what they did was 100% unique, but they were able to come to market with the right combination of technology long before anyone else had it all in one package. That is innovation. And by creating demand where there wasn't much demand by making technology a status and popularity symbol to the masses (not just the technology geeks), they skyrocketed to the top of the ladder.
The problem is they have relied on what was accomplished years ago to continue to push overpriced and underperforming technology to the masses of fans, and those fans are so deeply invested in their products that they don't know how to change to something better, and couldn't afford to if they did know. Their form is no longer unique and groundbreaking, their technology is no longer cutting edge, their function is no longer the most intuitive or the most popular, and their services are no longer the only choice for an all inclusive package. All they have left is the fans who will someday realize that they didn't have to spend $399 (with a 2 year contract) to get a 5.5" smartphone that pushes the boundaries of technology, form, and function. The iWatch (or whatever they are calling it) is an effort to create demand where there isn't demand, and people aren't so thirsty for stuff like this any more, so it will fall flat and fail. Maybe if they had done it a year ago before every technology company in the world had already brought wearable tech to market, but now it is old news, and only the die hard fans will buy into it.