The twin titans of satellite radio will split the Toyota (TM) - Get Report business.

In a broadly anticipated move, Toyota said Tuesday that it will factory-install

XM

(XMSR)

radios in cars starting in 2006. Meanwhile,

Sirius

(SIRI) - Get Report

radios will be available as dealer-installed options on nine models beginning in February.

For the pay radio service providers, factory installation is the preferred arrangement, since it requires little in the way of incentives or effort on the sales side.

Shares of both companies jumped in early trading Tuesday. Sirius shares, which have already doubled in the past month, rose 59 cents, or 7%, to $8.68, and XM shares added 78 cents, or 2%, to $38.51.

XM radios are available as dealer-installed options in 10 Toyota and Lexus models already. Analysts had anticipated that XM would get the all-important factory installation selection from Toyota.

XM has made a number of exclusive agreements with automakers such as

GM

(GM) - Get Report

and

Honda

(HMC) - Get Report

to have radios installed in new cars. And Sirius has made similar arrangements with

Ford

(F) - Get Report

and

DaimlerChrysler

(DCX)

.