LED price battle heats up

Germany's Osram is launching a new LED light bulb that costs less than €10 euros ($A13) to battle rivals, such as Cree and Samsung Electronics, for a share of the fast-growing market.

Light-emitting diodes (LED) – known for lighting flat-screen televisions and tablet PCs – are increasingly replacing other lights in homes, stores and on streets because they use less energy and are more durable.

But they cost much more than incandescent bulbs or compact fluorescent lights, putting off consumers from buying LED lighting for their homes.

A spokesman for Osram, which is being spun off by engineering conglomerate Siemens, said on Monday the company's new LED replacement for 40 watt incandescent bulbs would retail at €9.95 in Germany from June. Most comparable LED bulbs in Europe currently cost more than €15.

Osram's announcement comes only six weeks after US-based Cree raised its quarterly earnings forecast as it announced it would sell a new LED bulb replacing 40 watt bulbs for less than $10 in the United States.

Consultancy McKinsey has estimated that the market for LEDs will grow more than sevenfold to almost €65 billion by 2020, accounting for the bulk of global demand for lighting.

It expects the market for replacement bulbs to reach its peak next year and then slow as LED bulbs last significantly longer than other types of lamps, meaning customers buy new bulbs less often.

Osram said its new LED bulb lasts for 15 years. It will also offer LED replacements for 60 watt incandescent bulbs for less than €10 for a short time as a sales promotion.