Well, take a look at the total graphics market share now and 5 years ago - nVidia is at the bottom right now among the 3. Intel is killing low end discrete, AMD can sell it as part of APUs, and nVidia can't do anything here. They can shift to other areas: HPC, Tegra etc.Why is nVidia in a worst situation than AMD?
AMD is giving away their GPU tech to the market. Nobody cares about iGPU. If you think that the market is looking for the fastest iGPU you should compare the price of AMD's APUs and Intel's SB/IB cpus.
As explained above, I don't think margins on AMD's APUs are lower than the margins on sub $80 discrete GPUs. 3.0 GHz Llano is certainly not worth $120 when you can get higher clocked Phenom 2 for $100. And you can find Radeon 6450 for <$40.
As for nobody cares about IGP, Intel has like 60% of the market which is all IGP. Yes, I know, that includes a lot of IGPs that people aren't using because you can't buy a CPU without it, but people who care about GPUs like 6450 and 6570 should certainly care about IB and Llano/Trinity.