On Saturday we posted a report titled "Patently Apple's Transcript of the Opening Statement from Apple's Q2 2016 Conference Call by Tim Cook," wherein Cook noted that none of the sales for the iPhone SE model had made it into the reported quarter. Which country was leading with pre-orders for the new iPhone? Yes, China – with over 3.4 million orders. Cook repeated that last night when on CNBC's Mad Money show. Today we're learning that "Apple has increased orders for its low-priced iPhone SE in the second quarter of 2016, according to industry sources. The second-quarter outlook for related chip orders has been revised to more than five million units from 3.5-4 million.
The outlook for Apple's chip orders for iPhone SE for the third quarter will likely be similar to that for the second quarter, said the sources. Meanwhile, Apple has slowed down its pace of orders for iPhone 6s due to falling sales of the model, the sources indicated. Decelerating growth of the high-end smartphone market has encouraged Apple to put increased focus on the mid-range and entry-level segments, the sources said.
Despite higher shipments of iPhone SE, Apple's profitability could be eroded as a result of lower product ASPs and gross margins, the sources noted.