I'd say those prices are only possible if they are in Euros for sale in the U.S. For example, at today's exchange rate:
1499 Euros == 1929 U.S. dollars.
In any case, with Dell asking between $2300 and $2900 for the new dual-core Pentium (without display) I don't think Apple needs to drop prices anytime soon. A very minor price adjustment might be justified, but by offering a small speed bump and new video cards they can probably keep pretty close to their current prices.
Dell XPS 5 (announced yesterday)
-----------------
3.2GHz dual-core Pentium Extreme Edition 840
NVIDIA GeForce 6800 w/256MB (nice)
80GB HD
512MB DRAM
DVD-ROM (no burner)
-----------------
$2900
Except for the video card, I'd say that on certain tasks this Dell system could have some difficulty keeping up with the rumored dual 2.3GHz Power Mac (likely price point
$2500). And the PowerMac will have at least twice the hard drive space (160GB) and a DVD +/-RW burner.
And, of course, with Tiger the Power Mac gets GPU accelerated image processing (Core Image/Core Video -- CI/CV). Thus, on Core Image optimized tasks you'll have three dedicated "processors" working concurrently on the Power Mac, while the dual-core Pentium will only have two connected to an often under utilized GPU (but true, that Dell is a pretty damn fine game machine).
CNet link to other dual-core Pentium configuration and prices:
http://news.com.com/Dual-core+desktops+hit+the+market/2100-1042_3-5675050.html?tag=nefd.pop
Link to announcement of CI accelerated image editing program:
http://www.macobserver.com/article/2005/04/19.6.shtml
EDIT -- some small changes to the wording.