This paper presents a sensorless-controlled, low-cost, low-power, and variable-speed drive system suitable for fan and pump applications. The main advantages of this drive system are the low system cost, simple converter structure, and simple but robust sensorless control technique. The drive motor is a special hybrid switched reluctance motor. The proposed sensorless control method beneficially utilizes the stator side PM field and its performance is motor parameter independent. The unique low-cost drive system solution, simple and robust sensorless control features of this drive system, is demonstrated in detail in this paper. Important design details for practical implementation of the sensorless control algorithm are included. The complete drive system performance is validated using a prototype drive system.