To practice cannibalism; or in modern usage, to take parts from something to repair or use in something else, or for a new product to damage sales of an existing one.
From 'cannibal' plus the verb suffix '-ize' (to make or cause to become). The metaphorical sense of 'taking parts from something' became common in industrial and business contexts.
Cannibalize went from just meaning eat human flesh to meaning 'dismantle for parts,' which is exactly what salvage yards do—it's a perfect example of how metaphors expand word meanings!
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