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BlackBerries coming to Nextel network

Research In Motion says it will work with Motorola to develop the device as part of a multiyear agreement to provide units to Nextel.

Research In Motion said Thursday that it will work with Motorola to develop a version of the BlackBerry handheld that works on Nextel Communications' network.

The device, which will look like a handheld computer but be able to make voice calls as well as handle wireless data, should be available in the fourth quarter.

RIM said the deal was a multiyear agreement to provide units to Nextel. Motorola and RIM also have signed a licensing agreement allowing each company to incorporate technology from the other in certain products.

During RIM's third-quarter earnings report in December, the company said it was working to create a device that would run on Nextel's network.

"Today's announcement was a formalization of that relationship," said Bill Crawford, an analyst with U.S. Bancorp Piper Jaffray.

Nextel's network uses Motorola's iDEN technology, which enables two-way radio and wireless voice communications. The announcement on Thursday was a licensing agreement between RIM and Motorola, allowing RIM to use Motorola's iDEN technology. Motorola will also license technology from RIM.

Motorola representatives did not immediately return phone calls. RIM would not disclose any financial terms of the agreement.

IDC analyst Kevin Burden said the deal is a step in the right direction for RIM, but it isn't "a blockbuster deal."

Burden said Nextel's target audience is small businesses, a group that RIM hasn't been successful in wooing, so this announcement should help to attract them. And by adding voice to two-way paging capabilities, it gives big businesses another reason to consider the already attractive BlackBerry devices, Burden said.

BlackBerry devices have been popular in large companies because of their always-on access to e-mail.

"Nextel is one of the smaller voice carriers, so I expect any volume increases in device shipments for RIM to be marginal," Burden said.

Mark Guibert, vice president of brand management at RIM, acknowledged that small businesses are a new segment that RIM is addressing and that the popularity of e-mail makes BlackBerry devices appealing to everyone, including small businesses.

RIM shares shot up about 11 percent, or 2.33, and closed at 23.48 on the news. In after-hours trading shares dipped 17 cents.

RIM has a separate deal with VoiceStream to bring the BlackBerry to its network. The company has been talking since last year about enabling its devices to make phone calls.