Who designed the iMac G3?

The original iMac G3 was designed entirely in-house by Apple's Industrial Design Group, led by Jonathan Ive, with strong influence from Steve Jobs himself.

Why did Apple choose to make the original iMac "Bondi" blue rather than some other color?

The original answer published on August 17, 1998 follows:

It could simply be that Steve Jobs walked into Apple one day after visiting the Australian "Bondi" beach and decided that he wanted an ocean blue-colored Mac, but more likely than not, the designers did their homework.

As reported by Dynamic Graphics Magazine and the Color Marketing Group, a not-for-profit association of color designers, two colors that audiences will be receptive toward in 1999 are "Clearwater" blue which is described as "a transitional color that takes us from turquoise and teal into a more water-inspired blue" and "Alexis" blue which is "a blue with a slight green cast -- picture the dark aqua color of a classic car." "Bondi" blue seems to fit nicely between these colors. Just a coincidence? You decide.

In the November 1998 issue of MacAddict there is a mini-interview with Johnathan Ive where he discusses the ongoing study of color at Apple along with the complexity of color and how it relates to texture, material, and other variables. It's a good read, so you might want to check it out.

In response to this answer, on August 19, 1998, one reader by the name of Mike Cowan added:

To me it seems as if the designers at Apple took the "surf" analogy of Internet browsing to a visual level. The Bondi blue design is the color of a surfing beach in Australia; a place where great world-class surfing is found. The ice white seems to be the color of sea foam. In other words, Apple built a computer that is a stylized representation of a beautiful ocean wave. Simply brilliant.

Was the iMac G3 the first translucent Apple hardware?

No. Apple sold a translucent clear Newton, and the frequently forgotten eMate is also partially translucent. The iMac G3 was the first completely translucent desktop Macintosh.

One reader, Philip Machanick, mentioned that in addition to the translucent Newton and eMate, the button used to unlatch the Power Macintosh 8600, 9600, and G3 tower cases is a translucent aqua color. So perhaps Apple's Design Group wanted to create translucent cases before the iMac but their creativity was stifled.