While I would normally agree with you, Apple seems to be the exception to the rule. Apple has this yearly release cycle for each of their product lines, and even without pressure from competition, they are driven to improve their product lines with each iteration to keep their customers coming back for the latest & greatest. Each year they are competing with their own products, and they have to provide an impetus for customers to upgrade.
Look at the iPod. Apple has never, ever had any real, serious competition in the PMP space. Yet they continued to improve the iPod generation after generation. Larger capacities, color display, smaller form factor, video playback, Genius playlists, touchscreen, apps... Apple has made it their job to ensure that their customers always have a significant reason to upgrade, regardless of what the competition is doing.