Lars Magnus Ericsson goes into business
The first Swedish manufacturing company to focus on electrical equipment - Öller & Co - served as a training ground of skillful telecommunications specialists, several of whom left the company after a few years to start up their own workshops. The most successful of them was Lars Magnus Ericsson, who joined the company as a student in 1867.
After successfully learning the craft of instrument maker, he left Öller & Co in 1872 to embark on studies abroad on a travel scholarship he obtained through the recommendation of company founder Henric Öller. Ericsson spent a few years working at Siemens & Halske in Germany, returning to Öller & Co in 1875. That year, the company was at its peak, with 58 employees, 36 operative machines and production amounting to nearly SEK 100,000. Lars Magnus Ericsson's return, however, marked the beginning of the end for Öller & Co. He declined an offer of the position of operations manager for the company and resigned from Öller in 1876 to form his own company. Soon, Ericsson's former colleague at Öller & Co, Carl Johan Andersson, came on board, becoming part-owner of Lars Magnus Ericsson's new company, L. M. Ericsson & Co.
In 1877, Ericsson obtained his first contract with Televerket, the Swedish PTT, and began to compete with his former employer, particularly in the new telephone technology. When the telephone came to Sweden in 1877, Öller quickly incorporated the new product into his range, producing the first model in the same year. But after that, Ericsson took the lead.
Due to the competition from Ericsson and from American manufacturers, Öller never achieved any telephone sales to speak of. Nor was he among the front-runners in other telecommunications technology. When in 1883, Lars Magnus Ericsson and H. T. Cedergren constructed a telephone switch for up to 10 numbers, Öller & Co followed suit later in the same year, with a similar model for the Stockholm Bell Company. When Ericsson and Cedergren obtained a new patent for a switch for two phone lines in 1885, it was also not long, before Öller produced a similar device.
However, in 1886, the competition from his former proteges became too much for Öller, and he decided to phase out most of his production. Not only had Ericsson succeeded in making cheaper and better devices than Öller & Co, but he had also won over Öller's most highly-skilled employees by offering them higher salaries. Öller subsequently continued mainly with repair operations. He died in 1889 from a severe case of pneumonia, whereupon Öller & Co was shut down after 33 years of operation.
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