Apple is believed to be working on a new 4-inch iPhone that is expected to have the iPhone 6's 8-megapixel primary camera, 1.2-megapixel front camera, NFC chip for using Apple Pay, A8 processor, and improved connectivity like faster Wi-Fi, the Verge quoted a report by 9to5Mac as saying on Saturday.

The phone may have a slight design change and a curved glass around its edges.According to the report, the new device will "likely" be called the iPhone 5SE and will support Live Photos.

Apart from the phone, Apple may also launch a new version of the Apple Watch in March or early April.