Apple's New Entry-Level iMac Is $200 Cheaper

The new system makes compromises on compute and storage performance, but widens the potential customer base.

Apple iMac

Apple is making it $200 easier to own an iMac all-in-one desktop.

Company officials on June 18 announced that Apple is rolling out a 21.5-inch iMac that comes with a price of $1,099, about $200 less than the previous entry-level system.

The new system reportedly comes a week after speculation on the Internet that the company was planning a few minor improvements to the iMac systems. The latest iMac comes in at a good price—at least a better price than previous systems—but there also are some compromises that users will need to consider.

The iMac is powered by a dual-core 1.4GHz Core i5 processor from Intel, though the chip can leverage Intel's Turbo Boost technology to crank up the speed to 2.7GHz. The previous entry-level iMac—which came with a price starting at $1,299—included a quad-core Core processor that had speeds up to 2.7GHz.

The new system also includes Intel's HD 5000 graphics capabilities, 8GB of memory and a 500GB hard drive, which also reportedly represent a downgrade from what was in the $1,299 iMac. That system used Intel's higher-end Iris Pro integrated graphics and a hard drive that had a capacity of 1TB.

Like all iMacs, the 21.5-inch system also includes 802.11ac WiFi capabilities, two Thunderbolt ports and four USB 3.0 ports, as well as iWork productivity applications and iLife consumer software.

The new iMac comes less than two weeks after Apple's Worldwide Developer Conference (WWDC), where industry officials had expected news on a range of devices, including a new iMac system. Cantor Fitzgerald analyst Brian White before WWDC said he expected the conference would mark the start of what he called the company's "year of innovation," which will include new iPhones and possible wearable devices like an iWatch and an "iRing."

Apple officials in the fall are expected to launch new iPhones that will feature larger screens to better compete with smartphones based on Google's Android mobile operating system from the likes of Samsung that offer large displays.

At the show, much of the focus of Apple officials was on software. The company introduced new desktop software, the OS X 10.10 "Yosemite," which reportedly is due for release in the fall and includes cloud features. The new iMac currently runs OS X "Mavericks," but users will be able to upgrade to Yosemite for free later this year. Yosemite also is designed to work with iOS 8, making it easier for users to work across their Apple devices, from iMacs to iPhones to iPads.

iOS 8 also is planned for release in the fall.

Apple on June 17 released a second beta of Yosemite (Build 14A261i) to developers, the same time officials released iOS 8 beta 2. The initial betas of both Yosemite and iOS 8.0 were released to developers when they were first announced at WWDC.

During the show, Apple CEO Tim Cook reportedly told attendees that the installed base for Apple's Mac business—which includes not only the iMac but also the MacBook—this year hit 80 million, and that revenues had grown 12 percent over last year.