I'm not sold on the idea that this device will be a yearly refresh. I'm not ruling it out, but it doesn't seem like a commodity device like the iPhone has become. We are seeing slowing of iPad sales for the same reason.
To be fair, until recent years, if you suggested people would be getting rid of a perfectly working mobile phone to upgrade to a fractionally better one, every year, people woul dof looked at you as if you were some kind of nutter.
WATCH in terms of annual updates. It could be the sort of products which only sees an update once every 2 years, if it's not as popular as iOS devices. But I can see the watch being very, very popular and will likely become one of Apple's flagship devices.