And that's the keyword. It is potent "for what it is". But we're talking desktop PC here. ....
My point here is "$1299 iMac is pushing the limit already by throwing away discrete graphic and stick with traditional hard drive.
The previous entry iMac has a 640M and only 512 MB of VRAM. The Iris Pro has some coverage issues versus a 650M for higher 3D games but the entry didn't have a 650M.
The short term issue is that for this first generation Iris Pro Intel is charging i5+discrete graphics+VRAM money for the higher end iGPU and eRAM. They didn't "throw away" any performance at all compared to the previous version. What they didn't get was any better pricing on components. So it is "about the same performance" at "about the same price". Both of those should get better on the next iteration. [ It doesn't look like Nivida or AMD is going to just surrender the sub $90 desktop card or very low laptop discrete component markets so Intel is going to have to bring some better pricing to get more traction next iteration. ]
Similar issue with the drive. 5400 RPM and higher data density is going to lead to sequential stream times that around the same as older 7200 RPM drives that had lower data densities. The data transfer speed is not simply solely a function of rotational speed. Random access sure there is a difference but 5400 vs 7200 is trivial compared to either one versus an SSD (or a Fusion set up).
So to be on topic. What would Apple throw in the machine for another, rumored "low cost" iMac?
1). A more affordable next gen Iris Pro solution.
2). Same screen that is now priced better. (volume should also go up once TB docking station/display is ramped on same tech. )
3). Same two 4 GB DIMMs. ( same issue better component pricing)
4). 500 GB drive ( either denser, fewer platters, new one priced better or again better pricing on mature component at a higher capacity. iMac , mini, and any MBP with a HDD will all probably match on same drive to max volume pricing. )
I would say it would get a Core i3, meaning it's most likely will get HD 4200 or 4600 graphic which is even less bearable.
In 2014, Intel will have new components to work with. There won't be any new 4200/4600 graphics in 2014. Selling "year old" components iMac would be worse than "it is evil because Intel integrated graphics" hoo-ha that you are on about. A $1,299 computer with all last years parts has much bigger issues.
Then it will also has 4GB of RAM and for the final misery blow it would have 500GB of laptop hard drive.
2.5" isn't just for laptops. Capacity, not necessarily speed, is likely what entry level folks are buying.
(need somewhere to store their data. ) If Apple pushes the price down so that $1,299 covers Fusion set up then the storage drive speed at $1,299 isn't going to be an issue.