What they lose on each sale they will make up in volume.
This could be part of a strategy to get back into the schools. Schools seem to have two types of computers these days. New PCs or elderly Macs.
They had better be able to turn a profit on these, though.
Apple's profit margin should be much better than - for example, Dell's - for a similarily priced item.
Apple doesn't have to split the money with Microsoft. So there's a big profit right there.
Then, Apple's customer support costs should be much lower than the PC clone manufacturers. Mac owners generally have fewer problems than our Wintel counterparts, so we don't need to spend hours on the phone complaining to the Dell dude in India about dead-on-arrival hardware, worms, viruses, spyware, etc.
A $499 machine with those specs is not a money loser. You could get a PC at Wal Mart for $100 less. Oops, spoke too soon: Wal Mart's cheapest PC these days is $188: http://www.walmart.com/catalog/product.gsp?product_id=3356850