For Ericsson, the period from 1900 to 1918 meant a continuation of previous development in many respects. As before, production was primarily focused on telephones and switching equipment for telephone stations. Ericsson and Stockholms Allmänna Telefonaktibolag (SAT) had frequently worked together during the 1880s and 1890s and quickly assimilated technical knowledge from telephony in the US. With respect to telephones, Ericsson was itself very advanced in telecommunications technology.
The manual telephone system reached the peak of its development around 1900. In the US, a new switchboard system with a central battery had been developed during the 1890s. There were several advantages to this system, compared with the earlier local battery system. With a central battery system, telephone instruments could be simplified, and call connection was made easier, thus saving labor for telephone companies.
SAT, which operated telephone networks, was more interested in a central battery system than Ericsson. It is significant that minutes from the meetings of SAT's board of directors from 1898 to 1907 contain several references to this subject while it is hardly mentioned in Ericsson's minutes.
After H T Cedergren returned from a study trip to the US, SAT decided to use a central battery system in its telephone installations in Moscow and Warsaw. Ericsson was chosen to supply the equipment, but it was SAT's interest that in large part contributed to Ericsson focusing its manufacturing on telephone systems with a central battery.
With respect to automatic telephony, Ericsson's cautiousness in the early 1900s is striking. When telephone networks became large and manual switching became time-consuming and expensive, interest in the new technology began to increase. During the years around the turn of the century, there were also many inventions within automatic telephony. These were based on the American inventor Almon B Strowger's switching system, which had been shown at the World Fair in Chicago in 1893.
Automatic telephony spread from the US to Europe, where Siemens & Halske took the lead and opened Europe's first automatic telephone station in Hildesheim in 1908. This equipment had been developed by Siemens & Halske on the basis of the Strowger system. Before the First World War, new technology was limited in Europe, compared with the US. While there were only a few automatic telephone stations in Europe in 1912, there were 131 in the US.
In Sweden, Televerket, the Swedish PTT, was following developments in automation with interest due to conditions in Stockholm. Inspired by the US; several employees at Televerket produced a number of inventions in this field that would be important for Ericsson.
Ericsson remained passive for some time since its management wanted to reap the fruits of the manual system for as long as possible. The manual system was also regarded as superior, and the company pointed to the fact that no definite trend in favor of automation could be discerned among telephone engineers. Ericsson's US subsidiary in Buffalo also did not function as an information channel for the parent company in Stockholm with respect to developments in the US, because operations at the company were very fragmented.
The cautiousness with which Ericsson approached automation had significant consequences in the market. The company missed the boat. Major development companies that had been more foresighted were able to secure the most important markets. During the period up until 1910, when Ericsson perfected the manual system, orders were received for major telephone stations in Moscow, Warsaw, Stockholm, Copenhagen, Rotterdam and Mexico City, for example, but when demand for manual stations in large cities began to fall after 1910, Ericsson, as long as the company was not able to offer automatic stations, was forced to find its market in smaller cities.
Author: Jan Kuuse
