Early commercial instruments

As hinted in the above timeline, early telephones were technically diverse. Some used a liquid transmitter, which was dangerous and inconvenient and soon went out of use. Some were dynamic, i.e. their diaphragm wriggled a coil of wire in the field of a permanent magnet or vice versa. This kind survived in small numbers through the 20th century in military and maritime applications where its ability to create its own electrical power was crucial. Most, however, used the Edison/Berliner carbon transmitter, which was much louder than the other kinds, even though it required an induction coil, actually acting as an impedance matching transformer to make it compatible to the impedance of the line. The Edison patents kept the Bell monopoly viable into the 20th century, by which time the network was more important than the instrument anyway.

Early telephones were locally powered; ie they used a dynamic transmitter or else powered their transmitter with a local battery. One of the jobs of outside plant personnel was to visit each telephone periodically to inspect the battery. During the 20th century "common battery" operation came to dominate, powered by "talk battery" from the telephone exchange over the same wires that carried the voice signals. Late in the century, wireless handsets brought a revival of local battery power.

Early telephones had one wire for both transmitting and receiving of audio, with ground return as used in telegraphs. The earliest dynamic telephones also had only opening for sound, and the user alternately listened and spoke (rather, shouted) into the same hole. Sometimes the instruments were operated in pairs at each end, making conversation more convenient if more expensive.

At first, the benefits of an exchange were not exploited. Telephones instead were leased in pairs to the subscriber, for example one for his home and one for his shop, who must arrange with telegraph contractors to construct a line between them. Users who wanted the ability to speak to three or four different shops, suppliers etc would obtain and set up three or four pairs of telephones. Western Union, already using telegraph exchanges, quickly extended the principle to its telephones in New York and San Francisco, and Bell was not slow in appreciating the potential.

Signalling began in an appropriately primitive manner. The user alerted the other end, or the exchange operator, by whistling into the transmitter. Exchange operation soon resulted in telephones being equipped with a bell, first operated over a second wire and later with the same wire using a condenser. Telephones connected to the earliest Strowger automatic exchanges had seven wires, one for the knife switch, one for each telegraph key, one for the bell, one for the push button and two for speaking.

Rural and other telephones that were not on a common battery exchange had a "magneto" or hand cranked generator to produce a high voltage alternating signal to ring the bells of other telephones on the line and to alert the operator.

In the 1890s a new smaller style of telephone was introduced, packaged in three parts. The transmitter stood on a stand, known as a "candlestick" for its shape. When not in use, the receiver hung on a hook with a switch in it, known as a "switchhook." Previous telephones had required operating a separate switch to connect either the voice parts of the telephone or the bell. With the new kind, they less often forgot and left the phone "off the hook". The bell, induction coil, battery and magneto were in a separate "bell box" if it was a magneto exchange. For a common battery exchange, the bell box could be installed under a desk or otherwise out of the way, since it didn't need a battery or magneto.

Cradle designs were also used at this time, having a handle with the receiver and transmitter attached, separate from the cradle base that housed the magneto crank and other parts. They were larger than the "candlestick" and more popular.

Disadvantages of single wire operation such as crosstalk and hum from nearby AC power wires had already led to the use of twisted pairs and, for long distance telephones, four-wire circuits. Users at the beginning of the 20th century did not place long distance calls from their own telephones but made an appointment to use a special sound proofed long distance telephone booth furnished with the latest high technology equipment where, for a workingman's week's pay, they could sit comfortably for three minutes and shout across hundreds of miles without waking the neighbors.

What turned out to be the most popular and long lasting physical style of telephone was introduced in the early 20th century, including Bell's Model 102. A carbon granule transmitter and electromagnetic receiver were united in a single molded plastic handle, which when not in use sat in a cradle in the base unit. The circuit diagram of the Model 102 shows the direct connection of the receiver to the line, while the transmitter was induction coupled, with energy supplied by a local battery. The coupling transformer, battery, and ringer were in a separate enclosure. The dial switch in the base interrupted the line current by repeatedly but very briefly disconnecting the line 1-10 times for each digit, and the hook switch (in the center of the circuit diagram) permanently disconnected the line and the transmitter battery while the handset was on the cradle.

After the 1930s the base also enclosed the bell and induction coil, obviating the old separate bell box. Power was supplied to each subscriber line by central office batteries instead of a local battery, which required periodic service. For the next half century, the network behind the telephone became progressively larger and much more efficient, but after the dial was added the instrument itself changed little until Touch Tone replaced the dial in the 1960's.