Intel is able to field several different processor lines and architectures simultaneously, and also develop multiple new architectures at the same time. That's not something that most other companies can do. They've also been reasonably good at recovering from mistakes quickly (something that Microsoft has also been fairly good at).
That said, it'll be interesting to see how things pan out with the changes to the computing landscape that are in the works now.
On a flight a while back I struck up a conversation with a PhD that specialized in chip design. He suggested that if AMD was able to manufacture their chip designs in Intel's fabs, that they would be out Intel chips in terms of performance and power.
The idea was that because AMD uses fabs that are, basically, two generations behind Intel, that their designs have to be more innovative to be able to work within the constraints of the older process.
I'm no electrical engineer, so I took him at his word, but it certain points out that Intel's fabs are a distinct advantage.
Maybe if they partner with IBM. Still, even if Global Foundries is two generations behind Intel, that's still one of the most modern fabs and being constantly updated is very expensive.
I don't know whether Intel under bid AMD's pricing or not.
What we know Intel did do, though, is that they ran a marketing blitz of Intel Inside ads so that when consumers went to buy a computer and saw "AMD" instead of "Intel" they reacted negatively. Based purely on the marketing, customers would view the computer sporting the "Intel Inside" logo as the premium product.
http://www.nbcnews.com/id/33882559/ns/business-us_business/t...
The landscape could have looked very differently today had those deals gone through.
I think AMD actually ended up with the superior technology all the way back with the Athlon line (when Intel was still PIII) with a better memory architecture and a few other good odds and ends.
They tried to get back in the game with some bold moves, like buying ATI, but it just hasn't panned out for them.