2017 for a redesigned apple watch? i'd be very surprised given how long it took to update the original one.
Actually, I wouldn't be surprised if AW3 is already done. It's not uncommon of to have multiple version on the go at the same time.
Strategically, they also don't want to alienate early adopters by making the first gen obsolete. Apple's playbook is to slowly add new feature each model. But perhaps a radical re-design could happen in year 3.