Wendell talked about this. It will probably be a straight up integrated next gen GPU in discrete package, or a slightly more powerful one. Intel's HEDT, and Server CPUs don't have iGPU. Imagine the sheer number of OEM systems that are shipped with third party GPUs that don't require QUADROs for processing power. Intel just wants to ship you the whole Intel system.
There is a massive demand and Intel is just fulfilling it. And it might grow into a full force GPU that can compete with other workstation GPUs. It is a win-win for Intel.