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Late 2012 iMacs and Mac minis can only use 64-bit Windows versions with Boot Camp. That's because hardware limitations: it looks like the hardware of these computers don't work properly with 32-bit versions.
If you bought Windows 7 in a shop, you should have the 64-bit disc, too, so just insert it and run Boot Camp Assistant. However, if you want to use a 32-bit version, the only solution is to install an app like Parallels, VMware Fusion or VirtualBox, and install Windows in a virtual machine. Doing this, its performance will be less
Thank you for the quick reply.
I was hoping this is related to SW issue,
( since only after updating from 10.8.1 to 10.8.2 - the boot camp prompt for 64bit media requirement! )
Unfortunately, we need it for R&D purposes so cannot use VM / Parallels / VB.
Are you certain that this is hardware limitation ???
This is crucial for us to know, since we can try to gap a software issue.
There isn't any reason to drop the 32-bit support, so I'm sure it's a hardware limitation. For example, the new iMac has got 8 GB of RAM; if you install a 32-bit Windows version, only 4 GB will be detected.
Apart, you can use the 64-bit version for your uses, because both 32 and 64-bit applications work with a 64-bit operating system. My advices is to install a 64-bit version to get the maximum performance, and to prevent any problem. As it's a hardware limitation, you may have problems