Cree launches an LED bulb for under $10

LED chip and parts maker Cree (s CREE) has launched a line of low cost LED bulbs that will be sold at Home Depot, and one even retails for under $10. Some of the cheapest LED bulbs out there sell for $20, and Cree calls its new ultra cheap LED line “the biggest thing since the light bulb” (and it trademarked that phrase, too).

CreeCree makes the bulk of its revenue from of selling LED chips and components to other LED bulb and lighting makers. The company is profitable and doing well.

On Tuesday Cree also announced a better-than-expected earnings, raising its guidance for its fiscal third quarter, and reported better than expected profit and revenue for the current quarter. Cree earned $20.4 million on revenue of $346.3 million for the most recent quarter. Along with those strong earnings Cree saw its shares jump 12.5 percent in morning trading (as much as 19 percent earlier this morning).

Cree is selling three new LED bulbs: 1). a 40-watt, warm white replacement for $9.97, 2). a 60-watt, warm white replacement for $12.97, and 3). a 60-watt day light for $13.97. Cree says the bulbs save 84 percent of the energy that would be used by comparable incandescent bulbs, last 25 times longer, and come with a 10-year warranty.

As we explained in our research report for GigaOM Pro (subscription required), the LED market has hit a turning point, particularly for commercial and industrial building owners who are installing LEDs because it makes financial sense. Check out our report on LEDs (digest here), written by Ucilia Wang, and here’s our podcast discussion about the report.

It’s been a harder sell to get consumers to buy LEDs, but with new cheap products like this line from Cree that will slowly change. Still, consumers expect super cheap bulbs — compact fluorescents can sell for a buck or two, and incandescents for well under a $1.

Other companies that sell low cost consumer LEDs include GE (which bought LED startup Albeo last year), Philips and Lemnis Lighting, which introduced a bulb last year for under $5. Worldwide sales of LEDs rose 2.1 percent to $13.7 billion in 2012 from $11.3 billion in 2011, and will grow to $16.4 billion by 2017, according to Strategies Unlimited.