This is why I think people are expecting the near-impossible when they claim for "innovation." The original iPhone was awesome, it got followed up with the addition of 3G, then the 4 model gets a display with pixels so small you cannot see them at normal viewing distance.
So at the point of the iPhone 4, you've got some huge changes made. People obviously like the design of the 4, so Apple doesn't change it much when the 5 comes out and adds LTE. But Steve Jobs died, so the convenient story line is "Apple can't innovate" because apparently innovation is making a 4.8-inch screen. Or putting NFC in a phone because NFC.
I still can't think of a single thing that is close to being possible that would be the same wow factor as the original iPhone or the Retina display. Siri is always going to be a work in progress, and it's not like recognizing the different voices and pronunciations of 7 billion people is easy. Microsoft's Kinect certainly isn't perfect at doing that.
I think it's going to take flexible OLED displays for the next round of really wow-inducing products. If Apple can develop some smart watch that bends around your wrist to conform to its exact shape, then yeah, that might do it. But it's not like any of the watches out there now are anything like that. They're all essentially like the iPod nano mockups with a wristband, sensors and a better OS.
