Apple has today unveiled its next-generation iMac, a two-inch thick, all-in-one unit with a starting price $500 lower than the current model.

"A lot of people are going to ask: 'Where did the computer go?'" said Phil Schiller, Apple's senior vice president of worldwide product marketing, at the company's European Expo in Paris.

The previous iMac models featured a dome-shaped drive from which its screen emerged, but the new model incorporates all its components into the screen, including speakers and a DVD/CD drive built into the right-hand edge of the unit.

All three new models will feature the latest Power PC G5 processors.

The 1.6GHz and 1.8GHz models boast a 17in display, 256MB DDR Ram, an 80GB Serial ATA hard drive, an nVidia GeForce FX 5200 graphics card and a 533MHz or 600MHz frontside bus respectively.

Starting at $1,299 (€1,399 including VAT) for the 1.6GHz 17in model, and $1,899 (€1,629 including VAT) for the faster processor, the new iMacs will begin shipping in mid-September.

The third iMac is a 1.8GHz model with a 20in display, which boasts a DVD-R/CD-RW Superdrive and a 160GB hard drive at a cost of $2,199 (€2,059 including VAT).

The iMacs will also come bundled with the current Panther Mac operating system, version 10.3, and a standard bundle of Apple applications including its Safari browser.

The company claims to have sold more than seven and a half million iMacs since the machine was unveiled in Paris six years ago.