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Loudspeakers were first used in the telephone industry in the late 1800's. By the early 1900's, however, speakers were being integrated into phonographs, and developed for public address and sound reproduction (these early electromagnetic speakers were not very efficient, and were definitely mono).
In the late 1920's, Bell Labs, General Electric, Western Electric, and Westinghouse made huge advances in loudspeaker design to support the recent advances in motion picture sound. Sound reproduction became a priority, and speakers grew more refined. Horn speakers, moving coil, and electrostatic speakers were developed during this time. Home Audio was primitive and consisted of a console AM radio, with a small paper cone speaker, or perhaps a phonograph player.