Mercedes already has the 600hp+ S65, C65 and SL65, so this is really nothing new. Though admittedly this is in a different (smaller) vehicle segment than those.
BMW will continue to stay competitive in performance, even when not on the spec sheets. Whether they will have to resort to forced induction next time around to do so remains to be seen.
Also that car is sure to cost 100k+.
2008 Interlagos Blue E93 M3 - M-DCT
2011 Salsa Red Jetta TDI Sportwagen - DSG