The report says component suppliers are already preparing to begin producing the updated tablet, which should see launch in April.
Further more, the revamped tablet will be slimmer, lighter and use Retina Display, as seen on the iPhone 4.
Additionally, the news agency says Apple is preparing a smaller version of the tablet, despite CEO Steve Jobs dismissing the rumor that anything smaller than the current 9.7-inche model was in the works.
Says Kaufman Bros analyst Shaw Wu: "Having different sizes expands the market and makes it appeal to more people."
Steven Tseng, an analyst at RBS believes Apple will unveil the iPad 2 and a smaller iPad model next month during an event: "I think Steve Jobs will announce the new product in January, and we should see the new product hitting shops in about April."
