The extra cost hurt Intel with the mainstream community especially given the economic problems that happened in conjunction with the Core i7 original launch. AMD for their part saw an opportunity and acted. They priced their Phenom II X4 and chipsets to undercut Intel. They knew they could not compete with the Core i7 in a clock for clock war, so they hit the market where it counted; in the wallet.

However, Intel was not lying down they already had Lynnfield on the block and were working on providing a CPU to the mainstream that could offer the same advantages that the 1366 Core i7 could, but at a lower price. This CPU launched recently and it seems to be everything that Intel needed. It competes and even outperforms more expensive and higher clocked AMD CPUs while maintaining a lower price and power consumption.

http://www.tweaktown.com/articles/29...iew/index.html