People who would have bought an iPhone will still buy an iPhone, or future improved versions of iPhones. And people that hated Apple to begin with, they never were a potential Apple customer anyways, so those are the ones that would buy the Andriod. Google sales will be fine. And I don't see it cannibalizing Apple sales too much.
If anything, Google phones will cannibalize non-Apple devices.... since Google phones will be a direct purchase choice REPLACING phones in the same market space and same online stores like T-Mobile Store, etc. So Google will most likely cripple sales of dying struggling breeds like Sony-Ericcson, Nokia phones, and the no-longer-relevant Motorola (Hello Moto!!) cellphones. Google phone looks physically a lot like the Blackberry with the keyboard scheme, so it might send a punch in the nose to Blackberry sales. As a horde of Blackberry loyalists suddenly drop their berries, and see something that LOOKS a LOT like their berries, but is newer with more novelty factor. And so many of them will at least be tempted to try out the Android. Ouchie for Blackberry sales. 😉