Now is a good time to remember that bad economies are merely crucibles for the next crop of brilliant entrepreneurs. The development of mobile radio started before the Great Depression and received its biggest boost after World War II, but its leaders were made during times of economic hardship and transition. The stars in this industrial drama are the people who built Motorola, LM Ericsson, and the transistor.
Paul Galvin was just trying to be a successful small business owner. His first efforts ended in failure. Just as the Galvin Manufacturing Corporation began to enjoy a boom in its consumer radio business, the stock market went bust. It was 1929.
Galvin entered the car radio business in the early days of the Great Depression. At the time, car radios were aftermarket products, and Galvin recognized that he could succeed by bringing down the cost. Galvin renamed the company Motorola and developed relationships with dealers and distributors around the country. By 1936, the economy was starting to recover and Galvin was thriving. But there were more challenges ahead.
During World War II, Motorola developed the SCR-300 backpack two-way FM radio in a deal with the U.S. Army. Now the company was positioned for growth. But it was Galvin’s son Robert who turned Motorola into a radio behemoth, growing sales 30 times the level he inherited in 1958. Key to that success was the creation of internal, competing R&D teams and a commitment to ongoing innovation.
A much older telephone company, LM Ericsson of Sweden, would become Motorola’s fiercest competitor in mobile radio. Lars Magnus Ericsson started a telephone repair business in 1876. He also produced what might be considered the first mobile telephone for consumers. Except that this “mobile” telephone used wires. Ericsson’s wife Hilda liked to go for long drives in the country. Ericsson gave her a telephone with wires attached to two long poles. When his wife needed to make a phone call, she could pull over to the side of the road and use the poles to connect her phone to overhead telephone wires.
Like Motorola, Ericsson succeeded by doing what was needed to survive. The two firms would eventually become bitter rivals in both the land mobile radio (e.g., police radio) and cellular telephone businesses. The tactics employed by their land mobile radio sales teams often resulted in lawsuits.
Keep in mind that Motorola began making mobile radios in the vacuum tube era. Even the SCR-300 backpack radio used tubes. Invented in late 1947 by a team at Bell Labs, the transistor would require a full decade to perfect and commercialize. Sure enough, it was just as transistors started to gain traction that Robert Noyce and Jack Kilby, working independently, developed the first integrated circuits.
To the pioneers, hardship and change are just opportunities.