They would fight Apple in this. They also have AMD to fight for the non-M1 chip market... For a company used to enjoying dominance they have a lot of work to do to remain at the top.
Poking around Apple's 2021 marketshare wasn't anything particularly special, and https://www.statista.com/statistics/576473/united-states-qua... isn't showing any sort of "M1 driven spike", either. Apple's y/y growth was larger than PC's y/y growth (Annual growth for Mac was 28.3%, against 14.6% for the global PC market), but note there both are still growing. Meaning M1 didn't suddenly convert the industry.
Regardless a one year data point certainly doesn't prove a trend, certainly not of the "Apple is going to destroy Intel/AMD/Nvidia" variety.
And fair enough to say many people won’t switch because of inertia / software lock in which is true - but that’s not because of the quality of M1 or MacOS.
Kind of my point though; the low end isn't even worth it for PC manufacturers anymore. And by the time you get to a ~$600 laptop, you can have a cheap M1 device with 10x the performance/watt. The new M1 iPad Air starts at $700, and absolutely blows any existing Intel laptop out of the water, short of a desktop replacement gaming rig with discrete GPU.