Ø Gross margin, a profitability measure which is technically how much of the total revenues is left behind after meeting out direct expenses (cost of sales), saw a decline to 39.4 percent in the second quarter from 40.8 percent in the same quarter last year. Ø The accusing finger pointed at weak iPhone ASP. Ø What was more disconcerting was the gross margin trajectory Apple drew for its third quarter. Gear up for more softness, the company seems to say. A 37.5%-38% guidance was a far cry from the 39%-plus gross margin the markets were expecting at the start of the third quarter. Ø The bulk of the blame is now heaped on channel inventory reduction , as it strives to reduce inventories of high-end iPhone models and instead stuff with cheaper iPhone SE models and in the bargain targeting volume at the expense of value. Will the gamble work?