According to Fujirumors, the “camera line that most of us thought axed” that Fujifilm will be reviving is the X-M series. Apparently it will be called X-M5 and will be released sometime before the end of the year—September and November are a couple of months that Fujifilm likes to use for announcements, so maybe then. Nothing else is known at this time.
For those who don’t remember, the X-M1 was a short-lived camera near the beginning of the X-series that wasn’t particularly successful. It was unusual in that it had an X-Trans I sensor paired with an X-Trans II processor. It was a predecessor to the X-A line (the X-A1 had an identical body), and positioned lower than the X-E series. While it had a rangefinder look, it was given a PASM dial and didn’t have a viewfinder.
The X-M1 was released in the summer of 2013, right after Fujifilm began rolling out X-Trans II cameras. They also announced the nearly identical X-A1 just a few months afterwards. Those who were more familiar with the X-series and cameras in-general opted for the X-E1 or (a few months later) X-E2 because the X-E1 line was better (build quality, EVF, etc.), while those who were unfamiliar opted for the X-A1 instead because it was cheaper and the advantage of the X-M1 wasn’t obvious or well communicated. The X-M series was axed about a year later, but supplies lasted for another year due to unsold inventory.
While the upcoming camera will be called X-M5, I’m not sure what might be similar or dissimilar compared to the X-M1. I have some guesses, but it’s pure speculation. I have some suggestions for Fujifilm, but it might be too late in the design process to be implemented; however, I’ll give them anyway. I think the X-M5 is actually a smart move because Fujifilm is desperately missing a budget-friendly option for those who wish to get into the X-series but don’t have a ton to spend.
If I were Fujifilm, I would design it with a rangefinder-like shape that’s not too dissimilar to the X100VI and X-E4. In other words, it should look like the X-M1 to a large degree. I think they would be smart to keep the size down as much as possible—in fact, make the X-M5 the smallest interchangeable-lens X-series camera ever produced. Personally, I would ditch the PASM dial and use a shutter knob—the X-H series wen’t from non-PASM to PASM, so no reason X-M can’t go the other route. I doubt that it will have IBIS, unless the idea is not to keep the price down—an X-M5 with IBIS will likely be at least $900-$1,000 for the body alone, an X-M5 without IBIS should be in the $700-$800 range.
I would use the 26mp X-Trans IV sensor paired with the X-Processor V (like the X-S20, which also parallels the X-M1) and the old NP-W126S battery. Because of the small body size and heat dispersion issues, the camera will likely need some performance limitations to prevent it from overheating, which will simultaneously differentiate it from more premium (a.k.a. expensive) models. It won’t likely have an EVF, but it should have a tilting screen similar (identical?) to the one on the X-T50; however, if they do choose to add IBIS, don’t be surprised if it has a flippy screen like the X-S20. I would hope that Fujifilm would give it C1-C7 custom presets, but the X-M1 didn’t, so it’s possible that the X-M5 won’t either; however, that would be a mistake if they did—perhaps just C1-C4 if they feel the need to limit it (please give it C1-C7, though).
It seems like a safe assumption that the X-M5 will sit below the (discontinued) X-E4, eventual future X-E5, and the X-T30 II as Fujifilm’s low-budget base-level camera. Since Fujifilm discontinued both the X-A and X-T000 lines a few years back, there hasn’t been a good option for those on a tight budget to get into the X-series, except to hope for a good deal in the used market. I cannot tell you how many times people have asked me for advice on purchasing an inexpensive Fujifilm camera, but there just aren’t any options for brand-new bodies (the X-T30 II being the closest, currently). With the X-M5, there might finally be an inexpensive camera to recommend.