Friends become competitors

The Ericsson stand at the world exhibition.
The Ericsson stand at the world exhibition.

In 1896, however, Cedergren did something that can only be described as a hostile act towards Lars Magnus. Cedergren founded AB Telefonfabriken, in which SAT was the major shareholder, and started to compete with L.M. Ericsson & Co. The aim was not only to provide SAT with telephone equipment but also to look for markets abroad.

Cedergren acquired a suitable property at Arbetargatan 4 in Stockholm. Johansson describes how Lars Magnus now began to view the future of his own company with increasing pessimism. “For him the hardest blow was undoubtedly the inception of AB Telefonfabriken. He knew Cedergren and he knew the energy he could summon to attain any new objective he had set his mind to.”

There was no doubt that Telefonfabriken had to be taken seriously. Describing SAT for the Stockholm Exhibition of 1897, Cedergren formulated his policy like this: “In its technological applications, the company has always rapidly introduced, often before any other company in Sweden, the most recent and most useful inventions in the area of telephony. It has unfailingly used telephone apparatus and other equipment of the finest quality and, if possible, of Swedish manufacture.”

Thirteen years of collaboration with Lars Magnus had taught Cedergren and his colleagues to think about quality in practical terms when it came to telephones, exchanges, switchboards and other equipment. Cedergren’s tour de force at the Stockholm Exhibition was a multiple switchboard manufactured by AB Telefonfabriken. This was the first in Sweden to be equipped with relays and signal lamps, and was also the largest in the world, with capacity in its multiple crossbars for 20,000 plugs.

Many considered Lars Magnus to be pessimistic by nature, Johansson wrote. Even when he was in mid-career and successes came almost every day, he could be heard to say: “Yes, it’s all very well and we have more than enough to do. But the world’s need for telephones will soon have been met, and then where will our work come from? Better to produce items for consumption, matches and that kind of thing.”

Remarks like these do not indicate any real gift of foresight, but in his actions Lars Magnus did in fact display determination and the capacity to take risks. “His energy and his industriousness, his great passion for his work and his day-to-day conduct were not characteristic of a pessimist” is how Johansson put it.

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

Contact info/About the site