This is pretty severe revisionist history that presupposes that Intel's investment of billions every year in trying (and failing) to make soft X-ray lithography work well enough to double transistor count was just them not trying hard enough due to lack of competition.
So them more than halving prices and boosting core counts massively in the space of a couple of years just coincidentally coincided with AMD competing with them again?
I wont argue there wasn't lots of R&D going on behind the scenes, but their current improvements are still on the same architecture they've been using for years - this wasn't something they couldn't have done earlier (especially the prices - surely being able to lower them so much and still make a profit means that consumers were getting screwed earlier?).
Intel's competitive strategy has, historically, always been to retain such an overwhelming technical advantage in terms of transistor count that the other things didn't matter--they could make a huge profit while still providing better value than the competition. The only time that didn't work until now was when they tried to completely switch architectures (with Itanium) and they were able to quickly recover their advantage by returning to an x86-based architecture. Now, of course, this strategy has finally failed them, and all sorts of people are accusing them of having been complacent due to the lack of competition, but really I don't think they were doing anything differently from before (at least with regards to what you're talking about).
Intel has had serious yield issues for their top-end chips for the better part of a decade, so that will also affect pricing. Everyone from ARM and Qualcomm to AMD and nVidia has been able to successfully step to new process nodes with acceptable yields where Intel struggled to hit the same node steps.
