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Apple CEO: Don’t Fear Cannibalization, Embrace It

Published on January 23, 2013
by John Paczkowski

Hannibal_Cannibal_iPadBetter to eat your own than have your own eaten by others. That’s Apple’s philosophy on product cannibalization as related by Tim Cook during the company’s first-quarter earnings report.

“I see cannibalization as a huge opportunity for us,” Cook said Wednesday. “Our core philosophy is to never fear cannibalization. If we don’t do it, someone else will. We know that iPhone has cannibalized some of our iPod business. That doesn’t worry us. We know that iPad will cannibalize some Macs. But that’s not a concern. On iPad in particular, we have the mother of all opportunities because the Windows market is much, much larger than the Mac market. It is clear that it is already cannibalizing some. I still believe the tablet market will be larger than the PC market at some point. You can see by the growth in tablets and pressure on PCs that those lines are beginning to converge.”

In short, Apple doesn’t much care about cannibalization as long as it’s another Apple product that’s doing the cannibalizing. And if that product is creating more demand than it cannibalizes, so much the better — particularly if it’s demand for other Apple products.

“If somebody buys an iPad mini or an iPad, if it’s their first Apple product, a percentage of these people wind up buying another type of Apple product,” Cook said. “If you remember what we had termed the halo effect for the iPod with the Mac, we’re very confident that will happen with the iPad as well.”

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