Apple is preparing to launch an updated version of the iPhone SE early next year that'll serve as an alternative to its pricey flagship iPhone X.

The handset, tentatively known as the iPhone SE 2, will be assembled exclusively by Taiwanese manufacturer Wistron according to a report from China's Economic Daily News.

Apple launched its first generation iPhone SE in March 2016. Sales of the handset, which is based on the design of the older iPhone 5S, were rumored to be lackluster out of the gate (Apple doesn't provide a sales breakdown of individual models). Public opinion of the phone, however, seems high as the handset came out on top in the annual American Customer Satisfaction Index (ACSI) survey earlier this year.

Previous rumors suggested the new iPhone SE would be powered by Apple's A10 Fusion chip alongside 2GB of RAM and up to 128GB of local storage. Other specs would include a 12-megapixel rear-facing camera, a five-megapixel front camera and a 1,700mAh battery.

It's assumed that the device would retain the same iPhone 5S design with 4-inch display and perhaps even keep the 3.5mm headphone jack. A screen of that size is quite small by today's standards but as evident by the first iPhone SE, some people simply don't want a huge display on a smartphone.

The current iPhone SE starts at $349. For comparison, the iPhone 6s with a 4.7-inch display starts at $449.