The last few years we have seen the camera companies concentrating their efforts on transitioning their lineups to mirrorless, especially Nikon and Canon. This means that we have not seen any updates in the premium compact space since 2019, and it remains in a sorry state.
The phones now have a pretty good quality for their main lens, for example, the iPhone 14 Pro has a 24mm f/6.3 equivalent lens, but their other focal lengths are at least two stops slower. This gives a quite high bar to jump over, which would explain the lack of activity. They are however not optimal for taking photos, and I still believe that a well designed premium compact would sell well.
The currently best option, the Sony RX100 VII, is unfortunately a user hostile mess, and I am afraid the camera executives think We don’t want compacts anymore, when the reality is When will we finally get an enjoyable quality compact?
Such a compact would need to be small enough that you can carry it in a jacket pocket. This gives roughly the dimensions of the X100 from Fujifilm, with maybe another inch available for the lens if needed. That would be 13cm x 7.5cm x 3.2cm for the body, and up to 4.6cm extra for the lens to stick out. It needs flash and an electronic viewfinder, a small grip to hold the camera, and controls similar to larger cameras.
Excellent phone integration is a must. This means background transfers of images, fast transfer speeds (above 500Mps), user defined transfer formats (not only the small 2 mega pixels, and including full raw formats), and use of the phone as a remote with lag free video transmission. The compact should come with builtin flash memory (provide 64GB and 256GB variants) for better robustness, and it would be nice if it could share the battery type with its mirrorless siblings.
The sensor should be the DX crop (1.5x). We cannot provide a super zoom lens without too much compromises, so I would aim for two lens variants: 12-40 f/4-2.8 wide angle, and 16-80 f/2.8-4 universal. These are the most useful ranges when walking around, where you accept some limits in flexibility to get down to a truly compact package.
It also needs to be high performance. Autofocus, and capture speed should be of a level comparable to the Z6 II, so that it can serve also as a second camera. This would not come cheap, and I think a price of $1799 / $1999 for the the universal and wide ranges would be appropriate. Given the niche it fills, and the fact that current performance is so high that you would still be happy with it in ten years, it would sell well even at this price.