Updated from 4:14 p.m. EDT

RadioShack's ( RSH) bad news may drag down several companies in the wireless sector.

Specifically, Sprint PCS ( PCS), Verizon Wireless and Qualcomm ( QCOM) may see potential downside in sales in the upcoming quarters.

RadioShack announced today it expects third-quarter revenue to decline 3% to 4% and earnings to be reduced to 23 cents to 26 cents, down sharply from its previous estimate of 33 cents. Wall Street consensus was 34 cents, according to a Thomson Financial/First Call poll. July sales rose 2%, but the company told analysts that August sales "deteriorated dramatically" and blamed worsening consumer demand.

RadioShack shares plunged $4.74, or 16.37%, to $24.21 on news of the disappointing report, and investors may be in for another disappointment from the wireless sector.

Unlike other major electronics retailers, which have also suffered a disappointing year due to slackening demand, RadioShack derives the lion's share of its revenue from sales of electronic accessories and cell phones, and that puts several companies in the sector in a direct line of fire, analysts say.

Sprint PCS gets some 25% of its sales through RadioShack's 7,200 nationwide outlets. Verizon Wireless sees about 10% to 15% of its sales through the retailer, according to analyst estimates. What unites these two companies is the common technology platform -- the Qualcomm ( QCOM)-produced Code Division Multiple Access platform.

RadioShack's estimate cut "bodes poorly for Sprint PCS, since the company is one of Sprint's largest channels, in our view," wrote Kaufman Bros. wireless services analyst Vik Grover. "We think this can only be bad news for Sprint PCS's 3G 'Vision'" campaign. Grove reduced his estimates on Sprint PCS' net additional subscribers to 2.1 million for the full year, from 2.3 million subscribers (and against Sprint's 2.5 million to 2.7 million guidance). Grover reiterated a sell rating on Sprint PCS.

Separately, Qualcomm will be affcted, say analysts. RadioShack "noted that sales were weak across business lines, including wireless," wrote W.R. Hambrecht wireless services analyst Peter Friedland. "Given that RadioShack is a key distributor for Sprint PCS and Verizon, we believe this has negative implications for Qualcomm."

Friedland notes that though Qualcomm is 95% booked for 18 million to 19 million chipset shipments for the September quarter, the impact will be felt in the December quarter.

Sprint PCS shares slid 2 cents, or 0.46%, to close at $4.37. Qualcomm shares lost 6 cents, or 0.20%, to $29.23.