While I think the Apple Watch 2 will come out next year, I don't think it will be updated every year. As a person who wears Apple Watch everyday, here is the list of features I want in the future generations:
1.) Multi day battery life, so far I get 1 full day battery no matter what, but I don't want to take off my watch every night, because I want to use it as a silent alarm.
2.) Built in LTE. I'm not suggesting the watch should replace the iPhone, but it should be much less dependent.
3.) Bigger screen/less bezel. They have the technology to make OLED displays with rounded corners, yet the Apple Watch like most Apple products, is one of the worst offenders of extreme bezel.
4.) More health sensors. For example a thermometer! I can't believe no one is doing this. This is the simplest health sensor every smart watch should have.
5.) Anti reflective coating on the sapphire glass that's laminated onto the screen with zero gap.
I believe everything up there is possible, but not probable all at once. BTW, I didn't bother to list the obvious stuff like faster S2 chip, more storage, thinner design, more ram etc...