I'm hopeful that Apple will address the issue of screen size directly, in the following way:
Offer an iMac with all of the internals contained in a base unit, and a "snap on" display.
Apple can then offer two or three different displays for the iMac.
The advantage of this is twofold. First, it solves the problem of people passing up the iMac because of its screen size. Two, it allows Apple to update the screen sizes as the cost of LCD displays drops. Apple can change the displays with little development cost.
I think the reason that the current iMac has used the same display for three years is that to change the display would entail high engineering costs. The entire form would have to be redesigned, and then the motherboard would have to be changed, and engineering would have to go into ensuring that the unit cools properly without a fan.
With snap-on displays, Apple could change the display every 6 months without incurring high engineering costs.
Finally, there would be a certain coolness to an imac with a display that snapped on and off. Transporting it would be a cinch, aftermarket companies could make cases that held the base unit and the display. And of course, it would have to swivel around, for your viewing pleasure.
Back to reality, I bet Apple uses a 14" LCD, and raises the price to $1600 or more.
This scares me. I've talked to several ChumpUSA employees, at different stores, and all of them told me that the most common complaint about the iMac is it's screen size. One of them told me that he was convinced he could sell TWICE as many iMacs, if they had a 17" CRT display. That's 16" viewable. I asked them if Apple took feedback from them, and they said that they told Apple the same thing they told me.
What this tells me is that a 14" LCD iMac would be a failure in every sense of the word. Sales would not improve much from their current doldrums.
And the problem is, Steve Jobs loves tiny screens. Remember how long it took the original Mac to get a larger display? I believe it wasn't until Scully took over that the original Mac got a proper display! WTF!!!