As the cheapest FiiO player, I just need the following:
Able to drive all IEMs and most portable headphones without issues. It defeats the purpose if I need to pair it with an amp, and I'm not going to use it to drive full size headphones.
Utmost portability. It has to be smaller, slimmer and lighter than the X3.
Decent battery life of 10 to 15 hours.
Support most of the common music formats.
Neutral, transparent and accurate sound signature, which I believe is what FiiO is aiming for with all their DAPs.
Some kind of expandable storage though that will depend on the internal storage capacity.
If you need to cut cost, just remove all the additional ports like line-out, line-in etc, give it lower quality screen (I'm going to be listening to it much more often than looking at the screen), just don't compromise on the portability and the sound. My biggest fear is that FiiO tries to do too much on a $100 budget and ends up cutting corners, so the X1 ends up being a jack of all trade and master of none. FiiO needs to have clear goals with such a small budget that I'm definitely alright with missing out on some features. If you need more features, just go for the higher end models.
I hope FiiO understands why the Clip+ is so popular among audiophiles despite being an entry level dap.