In 1902, Ericsson opened a sales office in New York. Four years later, the sales office was transformed into a telephone production plant that began its operations in Buffalo, New York. Ericsson had ambitious plans to establish a major presence in the US, the birthplace of the telephone. The Bell Company's dominance, however, effectively blocked these plans.
In 1914, Ericsson decided that the Buffalo plant should focus on producing ignition equipment for cars. However, these operations did not achieve profitability, either, and in 1923, Ericsson sold its US company.
The next attempt to conquer the huge North American market was less audacious. In the 1930s, Ericsson had launched a switch called the XY switch with a capacity of 100 lines that was used in private exchanges and small public stations. Soon after the war in 1946, Ericsson signed a license agreement with the American telecom company Stromberg-Carlsson, which used the XY switch for rural telephone stations. The first US station using the XY switch was taken into operation in 1947.
These operations were all too modest, however, to enable Ericsson to take the plunge into the US market. Ericsson also contemplated purchasing a part of Stromberg-Carlsson, but these plans were abandoned after negotiations.
Instead, Ericsson acquired 60 percent of the shares of North Electric Company (NEC), which was engaged in the manufacture of telephones, switches and other equipment. Customers were US companies that were not a part of the Bell group.
After Ericsson had acquired a majority ownership, NEC developed a crossbar switching system for the US market. Despite excellent sales figures, however, the system never achieved a definitive breakthrough. In the mid-1960s, Ericsson sold its shares in the company and the American adventure was over again.
In 1956, Ericsson launched the Ericofon, popularly known as the Cobra. Its spectacular design had been developed for the US market. While it did become a hit in the US, production capacity proved inadequate. It was approved for the public networks and won prizes for its design. Yet, despite considerable investments in marketing, the Cobra was unable to make a killing in the lucrative US market.
In the early 1980s, Ericsson returned to the US through a joint venture with the American oil company Atlantic Richfield. Anaconda Ericsson, as the new company was called, produced cables, business switches and other products.
When the US telecom market was deregulated in 1983, Ericsson was on the scene and took its chance. In the late 1980s, Ericsson had one third of the market for mobile systems in the US and after decades of failure, the company had finally captured a major market in the US.
Author: Mats Wickman