According to "reliable sources" at 9to5Mac, Apple is planning on releasing an updated version of their 21.5-inch iMac in October with a 4K display, confirming reports from several months ago that hinted at a new smaller-sized Retina iMac.
9to5Mac believes this 21.5-inch iMac will be announced in October alongside the final version of OS X El Capitan, and will begin shipping in November. This shouldn't be too surprising considering Apple's past iMac refreshes have typically launched around October.
The device's main new feature will be a new 4096 x 2304 display, which is an interesting non-standard resolution slightly larger than typical 4K Ultra HD (3840 x 2160). This resolution was discovered in parts of the El Capitan beta's code, and it means the new 21.5-inch iMac will have the same pixel density (218 PPI) as the 5K 27-inch iMac released last year.
There's also a good chance that this new iMac will feature one of Intel's new Skylake processors, potentially the new 65W Core i7-6700 or even the 91W i7-6700K depending on the thermal capabilities of Apple's design. Considering the jump from 1080p to over 4K, Apple will almost certainly have to include some sort of discrete GPU as well, rather than opting for integrated graphics like in the current 21.5-inch iMac.
9to5Mac speculates that this new 4K display in the updated 21.5-inch iMac will raise its price, although Apple may decide to keep around the existing 1080p models at a lower price point. We'll just have to wait until an October announcement for the final details on specifications and pricing.