June 17 (Bloomberg) -- Sprint Nextel Corp. and Palm Inc. shares fell after an analyst at Wachovia Securities Inc. signaled the new Pre touch-screen phone may not be luring customers away from rival carriers.

A survey of retail sites showed that most buyers of the Pre are already Sprint subscribers, helping the carrier retain customers, Chicago-based Jennifer Fritzsche said in a report today. Palm began selling the Pre exclusively through Sprint in the U.S. on June 6.

The research suggests the Pre isn’t drawing customers away from larger rivals AT&T Inc. and Verizon Wireless, Fritzsche said. Sprint has lost more than 4 million contract customers in the past year as those carriers introduced more feature-heavy, Web-equipped phones, like the iPhone and the BlackBerry Storm.

The Pre, which features a touch screen and Palm’s new WebOS operating software, also faces increasing competition from Apple Inc.’s new iPhone 3G S, which goes on sale this week. Sunnyvale, California-based Palm aims to use the Pre to reclaim its reputation as a pioneer in handheld devices, earned more than a decade ago with the debut of its Pilot model.

Sprint, based in Overland Park, Kansas, fell 33 cents, or 6.1 percent, to $5.11 in New York Stock Exchange composite trading at 4 p.m., the biggest drop since May 13. Palm declined 68 cents, or 4.7 percent, to $13.67 on the Nasdaq Stock Market.

Acquisition Target?

Palm has also been the subject of takeover talk, though a transaction may not come to fruition in the near term, said James Faucette, an analyst at Pacific Crest Securities.

“The Palm operating system is the most valuable asset in the entire handset space, so for any company that has aspirations of being a player in smart phones, we think an acquisition makes sense,” said Portland, Oregon-based Faucette, who owns shares of Apple and rates Palm “outperform.” “The price would be a little difficult to digest,” said Faucette, who says Palm may command a $5 billion price tag.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: June 17, 2009 16:12 EDT