Perhaps the question is, how would you define "innovative"?
From a technical point of view, the AppleWatch is absolutely innovative: Basically it's an iPhone 4S, which itself is roughly in the performance ballpark of an average Desktop-PC around ten years earlier. And it's all in a tiny housing on your wrist, running on battery for many hours.
Anyone who knows the PC era around Y2k will recognize the amazing progress made there.
Of course the AppleWatch has to mature further. It's a gen1 product in a completely new product category: Wearables. As such it's more a kind of trying to understand that category and iterate closer to how it could be properly filled. Compare today's computers with the first home computers such as Apple ][ or C64. Or look how smartphones have evolved since the very first iPhone.
Now project development of products like the AppleWatch several years into the future. There are already tech demos available of things to come: Google Glass or Microsoft HoloLens for example. Wearables will be another huge change to life as we know it today. Not overnight of course, more like a slow, continuous transformation going on.
Take e.g. payment transactions. Cash is to be replaced by electronic payments in more and more areas. Having to rummage through your bag or pocket to get out the iPhone, unlock it and authorize the transaction is a comparably clumsy and time-consuming process. On the other hand (pun not intended), rising your wirst and executing a short finger press on your watch is a pretty elegant solution.
Same goes for using Siri. Instead of whizzing a bulky tech brick out of your pocket, it's much more elegant to have some unobtrusive piece of tech jewelry you can directly interact with. Remember
Apple's promo video of the "Knowledge Navigator"? Some years from now, the tech today known as the "Apple Watch" may be inside a brooch (akin to Star Trek communicator badges) or some other jewelry. Apple has already applied for a patent on "Smart rings". And the company is partnering with the fashion industry for a good reason. Hence the move to hire Angela Ahrendts, to get a better understanding of that future key industry.
The innovation potential of the Apple Watch may not be obvious at first glance. But I'm convinced it is there. And it's huge!