One other reason is that current sales pay for future development. Future development is becoming more and more and more expensive, so current prices have to go

One other reason is that current sales pay for future development. Future development is becoming more and more and more expensive, so current prices have to go up (or at least stop decreasing) to pay for it. Since everyone else has to pay for those development costs if they want to stay relevant, no one else can undercut Intel's current-gen processors, either; they'll be left behind when the next process matures. I work in Intel's Failure Analysis division, and we're expanding pretty aggressively. Same job, three times as many resources, much more money involved. It just keeps getting smaller.