The older eMac will be available until Apple has sold through its existing inventory, the company said.
Apple introduced the eMac in April 2002, amid fears that the company was losing its traditional customers in the education field.
The eMac was based on the iMac all-in-one, integrated CRT platform — just a few months after chief executive Steve Jobs had declared the CRT dead.
Shortly after its launch, Apple allowed its retail outlets to sell the eMac to consumers, although the company again restricted eMac sales to Apple education customers in 2005.
Although Apple's share in the PC market is tiny — roughly 2 percent of the PC market, by units sold — the company has always enjoyed a disproportionately large share of the education market, according to Roger Kay, principal analyst at Endpoint Technologies Associates.
Only today's K-12 students require desktops, however; university students typically use notebooks, Kay added.
However, Kay said he believed that the eMac's advantage was always one of price, and that by replacing a comparably priced iMac, Apple has kept its bases covered.
According to Kay, Apple shipped more than 300,000 iMacs to education customers worldwide. During the same period, it shipped around 40,000 eMacs to the same segment, or 13 percent of its total shipments to the educational market, he said.
"By far the majority of the shipments in education were iMacs anyway — the eMacs covered that lower price point," Kay said. "The education market has always been very price-sensitive; customers are likely to sacrifice a higher operating cost for a lower acquisition cost."
"The eMac has been their price leader on desktop," Kay added. "Pulling that out, and popping an iMac in, keeps that price point covered."
Interestingly, Apple's iPod strategy appears to be working.
Fordham University refers its students to online stores run by Apple and Dell, which offer Macs and PCs to students at a discount.
About 10 percent of the computers sold to Fordham's 15,000 students are made by Apple, according to Anthony Penson, who works as an on-site sales consultant and technician at the university's Rose Hill, N.Y. campus.
"Over the past three to four years that number has gone up, because previously you couldn't have seen a Mac no matter what you did, but now more students are buying them," Penson said.
"I think it was the iPod — students are used to using Windows, [but] then they get their hands on the iPod," Penson added. "I think of it as a gateway product — they hook up their iPods for the first time, are impressed and wonder what else Apple has to offer. Next thing you know, they're hooked."
Other universities, however, are PC-only schools.
"We have a requirement for PCs on campus — Macs don't qualify," said David Eckert, program manager for Carolina computing initiative at the University of North Carolina, Chapel Hill. "They [Macs and PCs] were significantly different when we started [the program] in 2000, so in order to offer a level playing field we had to choose between Macs and PCs. We are able to offer a much higher level of service, with standardization, on the PC platform."
Because of state law, the university can't sell directly to individuals, so the university store serves as a middleman for student purchases.
For the seven years the program has been in place, a minimum of 90 percent of the students buy their PCs through the university — all Lenovo ThinkPad notebooks, Eckert said.
The store sells desktops, but requires notebooks for class, he said.
The cheapest iMac model that Apple currently offers is its $1,299 version, which includes a discrete 17-inch monitor, and is based upon a 1.83-GHz Intel Core Duo processor.
While the new $899 iMac also includes those two features, the cheaper model uses Intel's integrated GMA 950 graphics chipset, a smaller hard drive, and a 24X combo drive, rather than the 8X SuperDrive Apple offers on its more expensive model.
Although Apple does not break out its product sales by model, the company said it reported Macintosh desktop sales of $614 million for its most recent quarter ended April 1.
The new Apple iMac includes: a 17-inch widescreen LCD display; a 1.83 GHz Intel Core Duo processor; 512 Mbytes of 667-MHz DDR2 SDRAM, expandable to 2 Gbytes; and a 80-Gbyte Serial ATA hard drive.
The chassis still includes the iSight video camera and AirPort Extreme wireless networking. Built-in stereo speakers, a min-DVI connector, and a mouse and keyboard are also included. Two FireWire 800 and five USB ports round out the system.
The software package includes Mac OS X version 10.4.6 "Tiger" including Safari, Mail, iCal, iChat AV, Front Row and Photo Booth, as well as iPhoto, iMovie HD, iDVD, GarageBand and iWeb, a new iLife application that allows consumers to publish Web pages or blogs on the Apple .Mac service.