What was Apples previous $500 laptop?

Never quite that cheap, but budget is relative, and the Neo is certainly a new degree of meeting that category, but I think in those relative terms the polycarbonate macbook would have been quite a good value for money at the time, even at around ~$1000. You could get cheaper laptops, and you still can, but what you'd get for that money would truly be terrible for the amount you'd save, unless you literally just played solitaire on them.

Even after years of operation, they'd be a decent buy on the used market compared to comparably priced windows laptops that would literally fall apart at the hinges and overheat.