I'm calling it the CrabApple.
http://news.com.com/Apple+unveils+49...bj=news.7354.5
Apple unveils $499 PC
Lets see. No upgradeable video. Everything on the mobo. Replacing a cdrw/dvd is like 150.00. A 1.46 cpu.
I think they will LOSE money in the short term.
Many Apple only users who would have had to buy a 1,300 dollar machine to upgrade can now do it for 499. Since they can't be making much on the 499 models and they will lose the profits on the people who buy it instead of the more expensive one they will lose money.
IF enough non Mac users are tempted to buy the cheap mac and then upgrade to a better one later they might eventually make money on it.