Apple Cannabilization

One key consideration in calculating the cash flows from a new project is side effects, including cannibalization, or erosion, of existing product sales. When Apple announced its new iPad Mini, one of the key considerations for Apple should have been the potential cannibalization of sales of the regular iPad. However, as the article points out, not all of the cannibalization is relevant. If Apple hadn't cannibalized some of its iPad sales, Amazon or Google would have taken these sales from Apple with their smaller tablets.