This is an unexpected announcement. Compared to the S-line 35/1.8 is has a similar size and shape, which makes it compact for a lens with this specification (the old AI 35/1.4 is even smaller). On the other hand, it has a faster aperture and is much bigger than other non-S primes such as the DX 24/1.7, 26/2.8, 28/2.8 and 40/2 so it doesn't really fit this group. Is this the start of a new line of fast, relatively cheap primes? I expect most photographers who want a compact wide-ish lens would be more attracted to the 40/2.
I think that Nikon should expand the range of affordable compact non-S primes with something like a 20/3.5, 60/2, and 100/2.8. These could be very attractive and nicely complement the existing lineup.
The new lens has a control ring which the S-line f/1.8 primes all lack (that was a curious omission on these otherwise high-spec lenses, maybe Nikon will upgrade them? ).
I have no doubt that more fast S-line primes are in the works, such as the 35/1.2 which was on the road map for a long time, and maybe something like a 24/1.4 and some fast primes wider than 20mm which are currently missing from their lens lineup.