I have to disagree. Apple's a lot bigger now then they were back then, and whilst many users would still buy an iMac, I for one would certainly not if I could pickup a single quad Mac Pro at $1,499.
There's only one reason why they'd give it a $1,000 premium over other equivalent systems, and that's to distinguish it from the iMac. The dual processor models are similarly priced to the competition, but no matter what processor option you chose the single processor Mac Pro is always about $1,000 more expensive than any other equivalent system.
Disagree or not, that's how it is and still is to this day. The reason the Mac Pro is $1000 starting more than the PowerMac's they replaced is due to the Intel Server chip Apple utilizes; the PowerMacs had a PPC processor, the Mac Pro's went into server territory with chips running $1k+. This is overkill, as a lot of us would rather a i7+, something between the top iMac and Xeon Server class processor.
No, as before it would not cannibalize iMac sales, just because it would for you doesn't mean the average consumer would buy it over an iMac. They didn't before because they don't WANT a tower, consumers like the iMac as it is all they need. Consumers don't need all the options that prosumers/professionals require, and they like the displays built in. A mid-tower that would actually replace the PowerMac would be perfect and a lot of us have been requesting such for a long time.
Think about this: I work in communications and IT. Businesses have thousands, even more, to spend on upgrading their systems. Many in the creative industry; film editors, photographers, design houses, had PowerMac's and ACD CCFL LCD's about 5-6 years ago. When the time came to upgrade, Apple killed Shake, many pro-Apps were ignored that many relied on, and the Mac Pro was $1k+ more than the PowerMac's. Since Many bought 20, 30 systems, that's $20-30,000 more just starting over their previous systems. That's a big chunk to invest into a company that seems to care not for their business any longer. So, a lot have moved on to Windows or Unix, use Avid Media Center or Adobe Premiere Pro as they have worked to keep or get that business Apple has lost which is HUGE. Yes, Apple is raking it in with iOS and consumer level products, but why can't they do BOTH? They have the capital and it would only make them more money. Steve got short sighted, with mobile devices only, and now the market is beginning to be over saturated with Apple goods. China and Japan markets didn't take to Apple devices as well as AAPL estimated, which is a big market Apple hoped to tap into. Many analysts are predicting the "GAP" effect with Apple, meaning too many stores, too quickly, and too many products will eventually slow Apple sales. Maybe not today or tomorrow, but very soon, we've already seen Apple stock beginning to falter.
