Apple (AAPL) - Get Report is working on a smaller, less expensive iPhone, according to China's Economic Daily News.

The report suggested that the SE 2 will replace the current SE model and will be priced at $450. 

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The current SE has a 4-inch screen that is much smaller than the 4.7-inch screen for the regular sized iPhone. 

The phone is expected to be released in the first half of next year, according to the publication. 

Apple recently released its tenth anniversary iPhone X to rave reviews and solid sales in spite of its $1,000 price tag. 

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