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| eicsson , erucsson , eridcsson , dricsson |
EricssonEricsson (Telefonaktiebolaget L. M. Ericsson) NASDAQ: ERIC is a Swedish telecommunications equipment manufacturer, founded in 1876 as a telegraph equipment repair shop by Lars Magnus Ericsson. In the early 20th century, Ericsson dominated the world market for manual telephone exchanges but was late to introduce automatic equipment. The world's largest ever manual telephone exchange, serving 60,000 lines, was installed by Ericsson in Moscow in 1916. In addition to manufacturing telephones in Sweden, Ericsson established joint ventures and telephone manufacturing factories in many other countries in Europe, and was responsible for a large share of the European telephone market. Many smaller countries, such as the Netherlands, relied on Ericsson factories to supplement telephone production by the national post, telephone and telegraph (PTT) facilities. By the 1990s, Ericsson held a 35-40 percent market share of installed cellular telephone systems.
Headquartered in Kista, Stockholm, Sweden, Ericsson is considered to be part of the so-called Wireless Valley.
Like most of the telecommunications equipment industry, Ericsson suffered heavy losses after the telecommunications crash in the early years of the 2000s. The company had to lay off tens of thousands of staff worldwide in an attempt to staunch the losses.
As of 2005, Ericsson is making an operational profit again. The loss-making handsets division was divested into a joint venture with Sony, called Sony Ericsson. Ericsson now concentrates on its core systems: supplying infrastructure for all major wireless technologies and modernizing existing copper lines for broadband services. In addition, it has one of the largest services divisions in the telecom industry and is steadily growing in new areas such as managed services. Ericsson is also a leading supplier of mobile core chipsets from the Mobile Platforms division.
From 1910 on it appears that Lars Magnus Ericsson and his wife Hilda regularly worked the first car telephone. Yes, this was the man who founded Ericsson in 1876. Although he retired to farming in 1901, and seemed set in his ways, his wife Hilda wanted to tour the countryside in that fairly new contraption, the horseless carriage. Lars was reluctant to go but soon realized he could take a telephone along. As Meurling and Jeans relate,
"In today's terminology, the system was an early 'telepoint' application: you could make telephone calls from the car. Access was not by radio, of course -- instead there were two long sticks, like fishing rods, handled by Hilda. She would hook them over a pair of telephone wires, seeking a pair that were free . . . When they were found, Lars Magnus would crank the dynamo handle of the telephone, which produced a signal to an operator in the nearest exchange." [Meurling and Jeans]
Thus, we have the founder of Ericsson (external link), that Power of The Permafrost, bouncing along the back roads of Sweden, making calls along the way. Now, telephone companies themselves had portable telephones before this, especially to test their lines, and armed forces would often tap into existing lines while their divisions were on the move, but I still think this is the first regularly occurring, authorized, civilian use of a mobile telephone. More on mobile working in my mobile telephone series.
Johan Hauknes points out that "According to Ericsson's Centennial History (in Swedish) L.M. Ericsson had already developed telephones for military purposes in the field -- mobile -- I would guess of the same kind as Meurling and Jeans describes, tapping into fixed systems. 'LME [sold] a large number of transportable field telephones and so called cavalry telephones to South Africa during the Boer War 1899-1902. Several types of transportable telephones for military purposes had been developed by LME during the 1890s, bought by Swedish Military...' (A. Attman, J. Kuuse and U. Olsson, LM Ericsson 100 år Band 1 Pionjärtid - Kamp om koncessioner - Kris - 1876-1932 (vol. 1 of 3), publ. by LM Ericsson 1976)
The first transportable phone documented in the centennial volume is from 1889 - primarily for 'railroad and canal works, military purposes etc.' There's a facsimile of an ad of this in vol. 3: C. Jakobaeus, LM Ericsson 100 år Band III Teleteknisk skapandet 1876-1976.) Railroad related maintenance and repair work, such as for sign based telegraph systems, was a major source of income for LME in the first years.
From a single modest workshop in Stockholm to locations in 140 countries, LM Ericsson has come a long way.
Unlike many of today's young entrepreneurs, who shepherd their brilliant ideas from drawing board to lunches with venture capitalists to shiny new office spaces and healthy bankrolls in less than a year, Lars Magnus Ericsson's entry into the industry he would help pioneer was almost gentle by comparison... almost an accident, one might say.
At age 14 Lars Magnus started working as a smith's apprentice across the border in Norway, which was close to his hometown Vegerbol in Sweden. He eventually became a full-fledged smith and then went on to try his hand at mining and building railways. Not satisfied, he decided that he needed more training, particularly in the field of mechanics. Thus, at age 20 he moved to Stockholm and started working as an apprentice under A.H. Öller, a maker of telegraph instruments.
Lars Magnus worked in Öller's shop by day and at night studied English, German, mathematics, technical drawing and materials technology. A government grant allowed him to work and study electro-technology abroad in Germany and Switzerland from 1872-1875.
In 1876 he struck out on his own. Together with a colleague from Öller's, Carl Johan Anderson, he opened Ericsson & Co, a small engineering workshop in central Stockholm. LM Ericsson & Co's business was the manufacturing and repair of telegraph instruments. The two didn't stay at this location for long, however. Business was so good that they moved twice within the next year, arriving at Oxtorget (Ox Square) in 1877. The workshop werkstad in old Swedish was modest, to say the least. But with the advent of Alexander Graham Bell's telephone, things really took off.
People brought their telephones to LM Ericsson to be repaired and eventually the firm began producing their own phones. LM Ericsson & Co changed location in Stockholm several times as it grew. In 1939 the confines of the city could no longer hold the expanding company with its plant, offices and workshops and it was relocated to Midsommarkransen a suburb of Stockholm.
Today LM Ericsson has over 100,000 employees and facilities in over 140 countries. That's a far cry from the little work- shop in Oxtorget!
Expanding eastward by Kristin Robbins
Good old-fashioned competition forced Ericsson to expand early on into new markets such as China.
Lars Magnus Ericsson opened his first workshop in 1876. Ten years later his business was growing at a fast clip. But if the 1990s have taught us anything it is this: when the technology is hot everyone wants a piece of the pie. So it went a hundred years ago and LM Ericsson & Co. was faced with competitors in its own backyard.
Telegrafverket and SAT (Stockholm General Telephone Company) were Sweden's telephone operators and Ericsson customers and collaborators. At least at first. But eventually the two operators began repairing and manufacturing their own equipment and Ericsson's domestic market share dropped significantly. The company was faced with the option to export its products or fold.
The company's initial expansion took it into Norway, Denmark, Finland, Australia, New Zealand, South Africa, the United Kingdom and Russia the latter two becoming Ericsson's most strategically important and largest markets towards the end of the 19th century.
Asian expansion started in the late 1890s when Ericsson began exporting equipment to Shanghai middleman firm Schiller & Co., which was headed up by compatriot Gustaf Öberg. The telephone concession in Shanghai at the time was with Britain's Oriental Telephone Co. (BOT). All of its equipment was purchased from the United States so, at first, Ericsson's business was small. However, BOT's contract expired in 1900. A new company, the Shanghai Mutual Telephone Co., took over and it was headed by none other than Gustaf Öberg. He brought in his supplier, LM Ericsson, to build a telephone exchange in Shanghai that very same year. Öberg was a shrewd businessman. He lowered tariffs and used plenty of publicity to jumpstart his business. Ericsson reaped the benefits and its sales in China increased.
The Oriental Telephone Co.'s success in Shanghai resulted in further expansion in the Far East. The company continued to choose Ericsson as its supplier of exchanges and handsets. In addition, Ericsson was able to secure business in Java and the East Indies through its other contacts.
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