Apart from the price, I think what's really attracting people to the Neo are the cool colors. I was at an Apple Store a couple of weeks ago trying to buy a M5 MacBook Air and I was eavesdropping on the conversations going on next to me from people looking at the Neo. Almost all of it was positive and people really love the colors!
I suspect Apple is going to cannibalize some MBA sales with the Neo because I'm recommending the Neo to anyone like my mom who use their laptop mostly just for browsing and FaceTime calls, and even the MBA is overkill for that.