Ripple effect: The MacBook Neo, which undercuts Apple's next-cheapest laptop by almost half, has sent alarm bells throughout the budget laptop market at a time when supply chain pressures are forcing rival prices upward. Right on cue, Microsoft has started to promote price-competitive Windows devices bundled with Microsoft 365 and Xbox Game Pass.

College students who purchase eligible Windows laptops before July 31 can receive a free year of Microsoft 365 Premium, Xbox Game Pass Ultimate, and a customized Xbox controller. Retailers including Best Buy, Amazon, Walmart, and Dell are leaning into the promotion, surfacing models designed to rival the MacBook Neo on both price and core specs.

As TechSpot recently explained, Apple's $600 MacBook (or $500 with student pricing) is tantamount to an invasion of what has long arguably been the Windows market's most reliable stronghold. Windows laptop makers including Dell, HP, Lenovo, and Acer have traditionally relied on comfortably undercutting Apple's entry point, which until now sat at around $900 with the MacBook Air.

The Neo changes that equation. Although the specs on Apple's cheapest MacBook won't impress power users, it does bring macOS and Apple's widely praised build quality squarely into a segment that's long been Windows territory. That shift comes just as memory shortages have pushed Microsoft to raise Surface pricing by hundreds of dollars.

Early demand suggests Apple has struck a nerve. Reports indicate the Neo is outperforming internal sales expectations, putting strain on the supply chain that enabled its unusually aggressive pricing.

Also read: The MacBook Neo is a $500 Wake-Up Call for the Entire PC Industry – You Had Me at "No Bloatware"

Visibility is another Apple advantage that Microsoft's promotion reveals. While savvy shoppers can find Windows laptops that trade blows with the Neo on price and specs, Apple places its new mainstream MacBook front and center on its website. Microsoft's promotion appears designed to counter that imbalance, giving partners a clearer stage to highlight alternatives that can match or exceed the Neo's specifications at similar or lower prices.

For example, Lenovo's 15.6-inch IdeaPad Slim 3 currently offers a Ryzen 7 5825U CPU and 16GB of RAM to the MacBook Neo's 8GB, with the option of 512GB or 1TB of storage, starting at $530. A Snapdragon X version of the laptop, also with 16GB of memory, is available for $500. Other highlights include the similarly-specced HP OmniBook 3 16 for $430.

To redeem Microsoft's offer, buyers must sign in with a Microsoft account and follow the on-device prompt after setup to begin student verification. Instructions are then delivered via email. Both subscriptions renew automatically and require a payment method, so those planning to opt out will need to cancel before the trial period ends.