I'm not convinced this is true. For the majority of consumers considering Apple laptops, they would often choose the Air over the Pro because the Air was the cheaper option. For many people, the Neo now being available as an even cheaper option will drive many of them to absolutely consider the Neo.What Apple have done well with the Neo, anybody considering a MBA wont be considering a Neo instead
I'm a tech consultant who works with a majority of people in the 60+ age range. They E-Mail, web browse, maybe use Word, Zoom, watch videos, etc. They don't game, they don't video edit, and they have very basic everyday use-cases.
While we all agree that the Air is a "better" machine on paper, it's not necessarily worth TWICE the price for people using a Mac for the tasks above. They don't need P3, Force Touch, memory bandwidth, or extra RAM. They don't care about Center Stage vs FaceTime 1080p, and don't count their speakers & microphones. Some of my clients will set up their Touch ID sensor, then forget it's there for the life of their Mac. And many can live within only 256 GB of storage.
The Neo may not be a compelling machine for tech nerds, but for average Mac users still lingering on an Intel machine, or a brand new-to-Mac convert, the Neo is almost a no-brainer. We must remember that -we- are not normal Mac users. We are "geeks" who care enough to read daily Mac news & forums because we are Mac addicts & professionals.
That does not make the Neo a bad Mac...just a lesser Mac. (A "lesser" Mac that is faster than the M1/M2/M3 in a variety of normal use cases that don't rely heavily on multi-core or GPU performance.) Give the little guy a chance.