It is AMD that has to PROVE something around here! It's obvious that Intel is holding up quite well in the integrated graphics. Once broadwell releases do you think AMD Kaveri will keep it's lead in the integrated graphics arena ? <--- (Rhetorical question for you.)

So you basically your argument is still "It's gonna be good because it's Intel".  This isn't a CPU discussion. Intel's CPUs eat AMDs for breakfast. When it's comes to GPU tech Intel needs to prove themselves. Nvidia and AMD have better GPU tech. Until they release something that shows otherwise, Intel has something to prove.

We all know this isn't a CPU discussion ... Your agument is the exact mirror opposite. 

I reiterate once again that it is AMD that has some proving to do! The fact that the iris pro 5200 mostly matches the A10 7850K while sometimes even BEATING it in some games just goes to show how much deep shit AMD's APUs are in.

Guess what ? The God damned iris pro 5200 takes up LESS POWER than the A10 7850K while dedicating LESS DIE SPACE to the GPU. 

The broadwell will simply just slaughter the AMD kaveri cause it's manufactured on a 14nm process node. That's a FACT. 

Just like Tessellation, Displacement mapping has been around for a very very long time, I remember Matrox demonstrating the technology with it's Matrox Parhelia years ago.

However, Displacement mapping alone can be pointless too, to make displacement mapping effective, the suface needs to be made up of a significant amount of vertices.
For example lets take a block made out of eight vertices, no amount of Displacement mapping is going to give you the relief of a fish.
A detailed relief can only be achieved if there is sufficient vertices in the base mesh to depict a new model, which is where Tessellation enters the picture.

Thus by extension, Displacement mapping needs Tessellation and Tessellation needs Displacement mapping, they're two technologies that goes hand in hand, neither of which will provide amazing results without the other.
However, if you look through history when Tessellation was just beginning it's main use was to smooth curves, which was one of the big advantages of AMD's Tessellator in the Radeon 8000/9000/x800/x19xx series, even if only a handful of games supported it.
Today, games are far more complex with more geometry than what we had back then, but it can still be used to smooth out some jarring polygonal edges in some models.

Essentially, Tessellation gives you more polygons via division (Or patches to give more detail), Displacement mapping takes height information from textures to provide additional details.

To say either is not required or not important is silly, making your entire argument completely moot.

What improvements do you think will occur on AMD's side of tessellation ? 

The manufacturers use the combination of GPU and CPU that provides the best value for money. Although Intel and Nvidia are both much better in performance, they just cannot compete in therms of cost effectiveness.

The APUs found in X1 and PS4 are very cheap but also very weak compared to a high end combination of Intel CPU and Nvidia GPU hardware.

AMD GPUs are by no means bad but I just want AMD to improve on certain areas of performance such as tessellation. As for their CPUs, yeah you may have a point that their mostly trash ...