I agree. When Mike Bell was asked about the pricing of Medfield phone chips (by ExtremeTech, if I remember right), he mentioned that Otellini had told him that "...they will not lose a deal on pricing".
Which clearly indicates that in markets where Intel has to enter or protect, Intel will be competitive with ARM pricing on a part-by-part basis. Intel has further demonstrated this by signing up Motorola, Lenovo, ZTE, and several other smartphone vendors proving that they can provide a price-competitive part.
As it is, Intel estimated the market of these micro-servers to reach only 10% of the whole server market. Being an incumbent with 64-bit, ECC, and the all-important enterprise software compatibility etc., I think Intel will hold on to most of this 10% market segment.