Microsoft plans to launch its own music subscription service later this year in a stab to topple Apple from its digital music distribution dominance.

CNet reports sources who claim Microsoft has a mean trick up its sleeve - hoping to exploit its desktop and financial dominance by securing rights to offer free songs to iTunes users.

The report explains Microsoft wants to offer subscribers to its service, "a new, Microsoft-formatted version of any song they've purchased from the iTunes store so those songs can be played on devices other than an iPod."

iTunes currently holds 82 per cent of the online music market.