Better local AI capability. It's definitely something they are working with, introducing new accelerator features with new processors. Currently most of the actually great AI tools still require you to offload the workload to a server somewhere. And some stuff is not worth doing in a mobile device before it can be done at a fraction of the power.
For the basic hardware features, mainly the camera and image processing tools are actually relevant. Almost all non professional photography in the world is now done with phones and there is still a lot to do to improve the miniature cameras.
Some of the greatest new features from the past few years are things people don't even realize weren't always there. Like for example my phone opens up when I pick it up and look at it. And locks when I put it down. This makes usage so much more fluid and is something that did not happen just ten years ago. This kind of UI optimizations are way more important than some numbers in spec sheet. And the local AI processing I mentioned is a key in enabling more situations where the phone understands what you want without you explicitly pressing buttons.
Technically they are not exactly on the same field which could allow using similar trademarks. But on the other hand in this case X's use of X could be reasonably argued to be very confusing for customers and therefore violating X's trademark.