On a question of the cannibalization of the sales of the iPod by the iPhone, Apple feels that if there’s going to be cannibalization of Apple, they want it to be by Apple. (link via the ondisruption.com blog)
On a related note, this is what Dr. Sanyal told us the other day in class, "Cannibalization is when a lower margin product affects the sales of a higher margin product" .
E.g. if the Maruti Zen causes the sales of the Maruti 800 model to reduce, it is not a bad thing for Maruti right?