I think Fiio will just include more RAM with their next product. Seems like the engineers are telling James, either you can have gapless playback + unlmited scanning OR you can have insanely awesome sound quality. And James said give me insanely awesome sound quality. So they set the RAM to prioritize sound over other functions and set limits on the RAM buffer for gapless and file scanning to not compromise the sound. Now if they had more RAM, this would not be a problem and the DAP could do both things really well. However, the way the X5 is currently built I think it's more a hardware issue that can't be fixed with a simple firmware upgrade for the moment. Basically we need more RAM in the X5.
At least, that's my understanding from what James was saying.
I think Fiio will continue to improve. With the Android based X7 on the way. I'm thinking Fiio will leave a lot of these issues behind. I'm excited for what's coming later this year. RAM is pretty cheap and I think Fiio could double their current capacity quite easily now that they know it's important to do so. Hell just quadruple it just in case.
(I'm thinking some fool will try to use gapless playback with a 40 minute DSD track and the RAM won't be able to buffer it and this will be a "deal breaker" and they will cancel their order and repeatedly complain of this issue on the X7 thread, but they have never held the X7 in their hands nor heard it)
*I think people need to remember that as passionate audio enthusiasts it's all about the sound quality. I think most people are just blown away by the sound of the X5/X3 so they're more than wllling to live with its limitation. In other words the trade-off factor is more than satisfactory as they just can't get this kind of sound from devices with perfect UI's and better functions. Honestly, even just a 1 year ago there was nothing in the $700 price range that could compare to the X5. I'm very happy it's 2014 and I'm grateful for Fiio, as they don't price their gears at ridiculous prices. So I think critizing the features without hearing the sound is kind of moot, as you won't know if the awesomeness of the sound will overpower the other faults. It's like I'm introducing you to a girl who is unemployeed and is a high school dropout and comes from a family of crimminals. She might look terrible on paper but if you see her in person and she's stunning looking, like the best looking girl you've ever seen in your life, you might not care.