By "Failed so badly" you mean "almost completely destroyed the market for low-end desktop video cards" AND "almost completely destroyed the market for dGPU in laptops."
Intel's iGPU has mostly failed at the midrange and above since almost no one wants Iris / Iris Pro. At the low end it has been a complete success and intel has no sane reason to drop iGPU any time soon.
I think that was likely for two simple reasons, the push for ever more compactness and manufacturers wanting to spend as little as possible (and those both helped a lot on laptops). Intel was already dominating (by installed base) with their iGPU before they integrated it into the CPU.
I don't think they destroyed the dGPU market in laptops (if that were even remotely close, then I don't think Microsoft would have put the anemic dGPU option in the Surface Book; in fact I think that exactly shows the opposite is happening; likewise Nvidia's focus on Pascal in mobile form factors and a glut of affordable gaming capable laptops).
Now if you said that Intel's iGPU is good enough for most people's general actual portable laptops use, I'd agree. But I also think people want to be able to have more graphic performance (workstation/pro laptops and for gaming). And hopefully they'll keep improving external GPU support so that we can get that.
I agree, but I think that's mostly because of price. And yeah Intel is not dropping iGPU anytime soon.
Isn't that still just speculation? All the links I see are what-ifs.
It is.
Even if they switch cross licensing to AMD instead of nVidia, it would still be an igpu built by intel.
Actually, I have a hunch that isn't the case. I don't think we'll see a major shakeup of the iGPU on Intel. It will improve some (and I think in ways that are about boosting overall performance, essentially trying to make good on heterogeneous potential) but isn't slapping RTG stuff onto their GPU.
I think the RTG aspect, aside from the patent licensing deals (to prevent lawsuits), is about premium designs. Apple being the major concern. Intel is trying to keep Apple happy and wanting to use Intel's chips (Apple switching from Intel to their own ARM designs would be a huge blow and a lot of people will take that as a signal of x86 really dying). Apple also wants strong GPUs, and they have a good relationship with AMD/RTG. So, Intel is going to put a decent sized RTG GPU and their CPU on an interposer, possibly with some shared fast memory; wonder if the GPUs can do Optane?)
I really think it is a move Intel sees necessary (as I'm sure AMD would be more than happy to work with Apple on integrating their GPUs into their SoC designs, so its not like AMD couldn't still offer the strong GPU that Apple would want if Apple felt they had a good enough CPU design).
Its a win for AMD, as they're not likely to make real progress into laptops even with Zen (which seems to be good, even with regards to power use, but I just think Intel still has a big leg up in the mobile/efficiency realm and will for probably a few years; even with a competitive Zen I think Apple might stick with Intel for consistency and they have the clout to get favorable pricing from Intel, so they'd likely just leverage that for better pricing than shake things up too much). But it gets AMD in some premium laptops, an area they've somewhat struggled with in recent years (and unless they make massive inroads with Vega, they could actually get further behind Nvidia who made it a focus of their entire consumer chip design and where Pascal definitely excels).
