The future of the light bulb looks dim according to a report by analysts iSuppli.

The report predicts that the market for LED lighting will show an annual growth rate of over 50 per cent and be worth $850 million by 2010. The bulk of this will be in lighting for electronics but, in the longer term, LED lighting could move into the home.

"The solid state lighting industry finds itself at a critical crossroads," says the report by Jagdish Rebello, principal analyst at iSuppli.

"Over the past two years backlighting of LCDs and keypads has emerged as the single dominant application for LEDs. Now, as the growth in the mobile handset industry starts to slow down, the solid state industry is actively seeking out new applications."

The costs of production for LED lighting are starting to compare favourably with incandescent or florescent bulbs. LED lights use less power and last longer than incandescent lighting.

So-called 'organic LEDs' (OLED) have failed to gain much market share, according to the report. The current models are fragile and short lived, but technology is being developed to address this.