As component prices fell, Apple began envisioning a replacement based around an LCD instead of the G3's bulky cathode-ray tube.

The new iMac's shape was inspired by a sunflower, with Apple's design team exploring different ways of attaching the monitor to the base before settling on a single stainless steel arm.

[17] The iMac G3 released in 1998 and was a major success for Apple; it sparked a 400% rise in the company's stock price in the subsequent two years and ultimately sold six million units.

[18] It helped reverse a dire financial picture for the company, marked the first major collaboration between returning CEO Steve Jobs and head of design Jony Ive, and was manufactured using new methodologies at Apple that would be applied to their future products.

[19][20] After the iMac's release, Apple revamped its product offerings for other consumer segments, including the Power Mac G3 and G4 and the iBook.

[21] In 2001, the design team moved from a separate building to a new space in company headquarters, offering a larger area to generate ideas, prototype models, and showcase them to Jobs.

[23] Ive produced a prototype that attached the computer components behind the screen, similar to his work on the Twentieth Anniversary Macintosh.

The final arm was made of stainless steel with an internal spring that balanced the screen while being free enough to be moved by the touch of a finger.

[30] The designers added the plastic halo ringing the screen that offered space for adjustment without touching the display, and minimized the look of a thick bezel around the edges.

[31] The iMac's final design suggested a sunflower or a desk lamp, and its anthropomorphic features made it, like its processor, feel more friendly and approachable.

[33] Rumors had predicted a flat-panel iMac since the previous summer, as pundits considered the machine due for a revamp amid declining sales.

[35] Apple positioned the computer as the center of its "digital hub" strategy, where the Mac connected multimedia peripherals like the iPod and organized and edited audio and video.

[18][38][c] The price of an iMac with the ability to burn DVDs was under US$2,000, compared to the $3,500 it had cost two years earlier for the capability on a Power Mac.

[46] The 17-inch model also added an audio-in jack, the ability to mirror the display to composite video devices via an adapter, and a Bluetooth expansion module for short-range wireless communication with peripherals.

[13] USA Today's Edward Baig and others liked the desk lamp look,[3] with many comparing it to the Luxo Jr. character that starred in a Pixar short animation.

[e] Others found the iMac G4 ungainly, with The Wall Street Journal's Walter Mossberg and The Vancouver Sun's Peter Wilson left with the sense it was always likely to tip over.

[39][52] Popular Mechanics's Tobey Grumet found the iMac larger than the promotional shots suggested, and that overall it took up nearly as much space as the CRT model it replaced.

[7][3] The large port selection was also praised,[2][54] with The Baltimore Sun's David Zeiler saying they met the needs of home and education consumers who would not care about the computer's limited expansion options.

[f] Joe Wilcox of betanews felt that the iMac and similar all-in-one systems were as expensive but less portable than midrange Windows laptop computers.

[2] Peter Wilson and The New York Times's David Pogue felt that the iMac was a better value than the lower-end Power Macs, and might steal sales away from the latter.

[8] Other complaints about the iMac included the placement of the computer's ports and power button on the back of the base, since this it made it harder to plug and unplug peripherals.

[3][54] Other deficiencies noted were the limited options for expansion,[39][52] color-shifting of the screens when viewed at extreme angles,[58] and small amounts of RAM on the entry-level models.

[63][1] The iMac G4 has been adapted by hobbyists to use newer components, including models that updated the internals with Apple's custom chips.