Ericsson (Telefonaktiebolaget L. M. Ericsson) (OMX: ERIC B, nasdaq: ERIC), one of the largest Swedish companies, is a leading provider of telecommunication and data communication systems, and related services covering a range of technologies, including especially mobile networks. Directly and through subsidiaries, it also has a major role in mobile devices and cable TV and IPTV systems.

Founded in 1876 as a telegraph equipment repair shop by Lars Magnus Ericsson, it was incorporated on August 18, 1918. Headquartered in Kista, Stockholm Municipality, since 2003, LM Ericsson is considered part of the so-called "Wireless Valley". Since the mid 1990s, Ericsson's extensive presence in Stockholm helped transform the capital into one of Europe's hubs of information technology (IT) research. Ericsson has offices and operations in more than 150 countries, with more than 20,000 staff in Sweden, and significant presences also in, for example, China, the UK, the USA, Finland, Ireland, and Brazil.

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. Throughout the 1990s, Ericsson held a 35-40% market share of installed cellular telephone systems. Like most of the telecommunications industry, LM Ericsson suffered heavy losses after the telecommunications crash in the early 2000s, and had to fire tens of thousands of staff worldwide in an attempt to manage the financial situation, returning to profit by the mid 2000s.

In 2001 the handsets division formed of a joint venture with Sony called Sony Ericsson. LM Ericsson is now a major provider of handset cores and an infrastructure supplier for all major wireless technologies. It has played an important global role in modernizing existing copper lines to offer broadband services and has actively grown a new line of business in the professional services area.

On 18 February 2008, it was announced that Aastra Technologies would acquire the enterprise PBX division of Ericsson.

Foundation

Lars Magnus Ericsson began his association with telephones in his youth as an instrument maker. He worked for a firm which made telegraph equipment for Swedish firm Telegrafverket. In 1876, aged 30, he started a telegraph repair shop with help from his friend Carl Johan Andersson. The shop was in central Stockholm (No. 15 on Drottninggatan, the principal shopping street) and repaired foreign-made telephones. In 1878 Ericsson began making and selling his own telephone equipment. His phones were not technically innovative, as most of the inventions had already been made in the US. In 1878, he made an agreement to supply telephones and switchboards to Sweden's first telecom operating company, Stockholms Allmänna Telefonaktiebolag.

Also in 1878, local telephone importer Numa Peterson hired Ericsson to adjust some telephones from the Bell company. This inspired him to buy a number of Siemens telephones and analyze the technology further. (Ericsson had had a scholarship at Siemens a few years earlier.) Through his firm's repair work for Telegrafverket and Swedish Railways, he was familiar with Bell and Siemens Halske telephones. He improved these designs to produce a higher quality instrument. These were used by new telephone companies, such as Rikstelefon, to provide cheaper service than the Bell Group. He had no patent or royalty problems, as Bell had not patented their inventions in Scandinavia. His training as an instrument maker was reflected in the high standard of finish and the ornate design which made Ericsson phones of this period so attractive to collectors. At the end of the year he started to manufacture telephones of his own, much in the image of the Siemens telephones, and the first product was finished in 1879.