http://www.macbytes.com/link.php?sid=20081010164710
The early days of Apple Computer taught the company that they could charge a premium for products if they were substantially better. When cheap PC clones began flooding the market Apple was still selling computers at a premium but weren't selling them at the pace they had hoped.
In an effort to alleviate the situation Apple released their first sub $1000 Mac, the Mac Classic. Sharing a form factor with and replacing the Mac SE the classic featured no hard drive in the base configuration, shipped with a paltry 1MB of RAM and barely squeaked under the thousand dollar target at $999.
The machine was considered a complete dog by those in the know but people who wanted a Mac snapped the beauties up in surprising numbers. Apple's first stab at the moderate cost market came when the Mac Classic was introduced on October 10, 1990.