i honestly woulda thought that it would be smarter to launch the handheld first rather than ask people to buy two lumps of new hardware. that could be $1000+ of spend if they launch them together, they'll cannibalize and compete with each other.
Interesting. I think that makes sense on the purchasing (customer) side, but that would make the product development challenging. When we built our first portable game system, there were so many architectural considerations that naturally drive certain compromises, starting with a new, portable architecture in mind would be cleaner. Doesn't mean they couldn't do it the other way around, just that it seems to increase risk of a flawed launch.
Also, to your point, I do think there will be natural cannibalization of Xbox sales by a handheld. Many who buy it probably won't ALSO buy the non-portable version. But that would also apply if they buy a portable that runs the current generation, they would be LESS LIKELY to then quickly buy the future next Gen Xbox, which could hurt next get game dev. If they wait to release on the next get platform, they can work with devs to take advantage of portable and next gen features to maximize success.
If I were running the product dev on that, I'd rather deal with the negatives you raised (entirely valid ones) in order to get the advantages of better game support at launch, better design around any next-gen controller features, better concept integration with the living room version. E.g., maybe it's a portable CPU, but only runs at 960p on the handheld and uses external graphics in a docking station for 4K+ on the big screen TV, or customers who don't want to spring for the "Pro" docking station, can just connect the portable piece to the TV for cheaper 960p gameplay.