LOS ANGELES (Reuters) - Yahoo Inc. Tuesday said it was launching a new online music subscription service, aggressively competing against current providers such as Apple Computer Inc., RealNetworks Inc.'s Rhapsody and Napster Inc. with lower pricing.

Yahoo said it was offering the service, beginning May 11, in a trial version with an introductory price of $4.99 per month for an annual subscription, or $6.99 on a monthly basis.

The new service, called Yahoo Music Unlimited, lets individuals play tunes from a catalog of more than one million songs, transfer tracks to portable devices and share music with friends through Yahoo! Messenger.

Rivals Napster and Rhapsody provide subscribers unlimited streams on demand and other features for about $9.99 a month and both recently added portability, charging users about $15 a month for subscriptions including that feature.

Yahoo Music General Manager David Goldberg said the company could eventually raise its prices. "We're not saying it's the price forever, but we're assuming it's the price throughout the Beta (trial) period, which is an undetermined amount of time," he told Reuters.

"Yahoo's clearly putting big pricing pressure on folks like Real and Napster. Neither have the advertising leverage that Yahoo has, so this has the potential to be highly disruptive to any digital music subscription service, particularly Napster since its a pure-play digital music company," said PJ McNealy, an analyst with American Technology Research.

The shares of Real and Napster fell in after hours trading on iNet. Real's stock fell nearly 11 percent or about 80 cents to $6.50 after closing at $7.30 on Nasdaq. Napster fell about 15 percent, or $1 to $5.35 after-hours after closing on Nasdaq at $6.35.

Napster could not be reached for comment.

RealNetworks last month unveiled a free version of its service, offering users 25 songs streamed on demand, Internet radio and other features in hopes of luring consumers to its other fee-based services.

"We just started giving away music for free on Rhapsody and there's more movement to give consumers affordable access to music. Yahoo's jumping into the subscription market is a complete validation for RealNetworks," said a Real spokesman.

By linking the service to its instant messaging application, analysts said Yahoo is aiming to make legal music- sharing among subscribers a focus of its offerings.