The development line of the A CPUs that led to the M1 is definitely not ‘a new bottle every 1-2 years’. The M1 out-innovated Intel, Qualcomm and to a lesser extend AMD.
Apple also branched out to other categories with the Apple Watch and AirPods.
Apple is most definitely still innovating.
However, I'd argue the CPU change is considered a black box vertical improvement by the vast majority of end users. It's a big innovation, but it's still just an improvement to an existing product. And AirPods aren't really groundbreaking.
Apple Watch counts, but is also just a nicer version of something available to people for almost a decade, whereas the iPhone, iPad, MacBook Air, and early Macintoshes really offered something very different from anything else you could reasonably get at the time.
A modern equivalent would be, say, "just works" AR glasses, or something no one even knew they might want (faster horses vs. cars, etc.). It's a lot to ask for, but that is the reputation they're trying to maintain, and they are worth over $2 trillion.
When I started in computing most major players had their own CPU's, and over time everything converged on mostly Intel with AMD/ARM in there to mix it up. Now we see companies swinging back to the old days where each will have their own CPU's. To me its a return to vertical integration and exposes all of us to a new era of lock-in.
Okay. And? You still need innovation to make something like the M1.