NEW YORK (TheStreet) -- Being an Apple (AAPL) - Get Report parts supplier is proving to be both a blessing and a curse for Jabil Circuits (JBL) - Get Report, which makes phone casings for the iPhone 6.

Jabil, which is scheduled to report its fiscal second-quarter results after the bell on Wednesday, has benefited from booming iPhone sales, and yet a Citigroup note on Monday said Apple is moving to diversify its suppliers, which could be a big obstacle for Jabil.

Citigroup analyst Jim Suva downgraded Jabil's stock to sell from hold, pointing to Apple's move to use more suppliers.

"We expect JBL to continue to benefit from strong iPhone 6 product cycle in the near term [...] However, we note incremental capacity from new entrants, driven by Apple’s strategy of diversifying suppliers, is likely to pressure [Jabil's] market share/margins in normalized iPhone cycle," Suva wrote.

Suva is not saying Apple will end its partnership with Jabil. He's only noting that Jabil has more competition for Apple's business.

Remember also that Jabil is part of the fast-growing mobile-device market and that its shares trade at a relatively cheap 11 times estimated earnings for this fiscal year. The company is also supplier for BlackBerry (BBRY) and Cisco (CSCO) - Get Report

For the quarter ended in February, analysts estimate Jabil will report earnings of 45 cents a share on revenue of $4.27 billion. For the full year ending in August, earnings are projected to be $2.02 a share on $18 billion in revenue, which would be a 14% increase from the prior year.

On Wednesday morning, shares of Jabil traded at $22.61, down 3 cents.

This article is commentary by an independent contributor. At the time of publication, the author owned shares of Apple.