You're partially citing some of Clayton Christensen's observations in the Innovator's Dilemma (which Andy Grove, Intel's former CEO, used to refer to):
'Letting your company get chased upmarket,' is a pretty good synopsis: yielding ground rather than trying to get competitive.
Clayton talks about the steel industry as a common example, with big "integrated steel" companies not adopting mini-mill tech that allowed for lower capital investment costs, and a big price reduction, first at some quality limitations to protect high margin integrated business, but with the low end market ongoingly overtaking more market up until they "won".
I am curious though- Intel is still charging ~$281 for your run of the mill, very boring grade laptop chip. In some ways, it seems like their obstinacy is finally proving it's payoff, even as they abandon market segments. Which is both how disruptive innovation continues to happen- with the low-level market getting eatten out from under them with Rockchip and MediaTek chromebooks, and perhaps gaining more ground- but it also seems to have proven to some degrees how effective their protectionism has been, that they have not had to get competitive on laptop pricing.
Making chips Apple would've wanted would have put Intel at a remarkably different price:performance scale than what they've stood on.
A related anecdote - at my previous job, I was at an annual sales conference event, where Mr. Christensen was an invited speaker. Both before and after his speech, the management kept bragging about "how unique we are", "how fat our margins are", and "how none of our low-cost competitors could match our offering", despite real mid-to-long term danger to their core business, completely ignoring the innovators dilemma, or hoping that it's not applicable to them. It was almost painful to watch. My prediction is that my old company will get disrupted and ceased to play such an important role in just 5-7 years.