Actually they are being very clever, intel has been thumping them. Even when amd had a better product intel still whipped their butts. Intel is just something people will always buy regardless of what amd bring out.
It's kinda like those amd fanboys except the volume is 10000 x more.
So they keep swimming up stream without a paddle in the cpu market.
Yeah, the never had near Intel's market share even when they were offering better products at cheaper prices (although that ship has long since sailed anyways), but the competition was still a good thing (
for them) because:
1. They made lots of money off CPU's and chipsets sold, obviously.
2. It kept their image up as a real threat, and kept them in people's minds. Intel always took new announcements from AMD very seriously. This obviously did wonders for their image as the underdog manufacturer, a fact attested to by the existence of all the fanboys, as you mentioned. People would then also try other AMD products, not just CPU's.
3. (Probably the most important) It kept Intel on their toes and forced them to constantly innovate. This in turn caused AMD to try and one-up them, and so the cycle went on. Technology advanced at massive rates a few years ago, and that meant people were more interested in the latest tech, and upgraded more, especially since you didn't need a new bloody motherboard for every single slight CPU change as you do now with Intel CPU's. Thus, more $$$.
Not to mention the obvious bad news it means for us. Remember in the good old days when we had loads of graphics card manufacturers? S3, 3dfx, Matrox, ATI, Rendition, and that weird new company whose name no-one knew how to pronounce, nVidia? They used to all support a standardised API, OpenGL (and later Direct3D) so they all worked perfectly in games, you had lots of choices. Now they're all gone except for 2, maybe soon to be one. They've been assimilated if you will. Look how much the prices of graphics cards have gone up compared to the other components, and look how similar the two's products are. Now imagine if there is only one manufacturer. No reason to develop quickly and no reason to be reasonable in pricing either.