Apple is close to starting production of an updated iPhone SE that will serve as a new low-end model and is also aiming to manufacture new iPad Air models, Bloomberg News reported on Tuesday, citing people familiar with the matter.

The refreshed Apple products are expected to be released early next year, the report said.

This marks the first update to the iPhone SE since 2022 when Apple added 5G and a faster A15 Bionic chip to the model. The model helps the company to better compete with industry leaders Samsung, Xiaomi and others in the mid-range smartphone market.

Apple did not immediately respond to a Reuters request for comment.

The iPhone SE is generally considered the cheapest model from the iPhone series with prices starting from $429.

The new iPad Air models — codenamed J607 and J637 — will focus on internal improvements, the report said, adding that the company is also preparing an updated version of its Magic Keyboard accessory, codenamed R307 and R308, for both the 11-inch and 13-inch versions of the new Air.

The new SE phone is expected to support the company's AI software, Apple Intelligence, the report added.

Early in September, Apple unveiled its long-awaited AI powered iPhone 16 models which promised improvements in its Siri personal assistant as well as enhancing features such as understanding and identifying objects captured by the phone camera.

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