It was nearly 50 years after the invention of the telephone when AT&T formed Bell Telephone Laboratories as a subsidiary in 1925. The unit was created to merge and centralize the research and engineering work of AT&T and its manufacturing and supply arm, Western Electric. Frank B. Jewett was its first president.

     Bell Labs can be credited with major roles in the development of computer technology, the microelectronics industry, and a host of modern communications technologies. In its first three years of operation, researchers demonstrated long-distance television transmission, sound/motion pictures, the artificial larynx, and the negative feedback amplifier (used to reduce distortion in radio and telephone transmissions). During the 1930s, researchers developed an electrical digital computer, a radio altimeter (a new means of radio transmission), and radio astronomy. In addition, they conducted research on stereophonic sound. During World War II, the U.S. military profited from research at Bell Labs on radar and wireless communications.

     One of the most notable Bell Labs inventions was the transistor, a small electronic component with a semiconductor, which is now found in virtually every electronic device and led to solid-state communications and transformation of the electronics industry. The transistor was invented in 1947 when a team of scientists took initial semiconductor research and improved upon it in order to amplify signals in the same way as the vacuum tube did but with more reliability and much less power and space consumption. Bell Labs developed techniques to make the transistor practical, and it eventually became a fundamental and essential component of radio, tele­ vision, telephone, and entertainment equipment. The transistor radio, one of the first mass-produced products based on this invention, appeared in 1954, quickly becoming the best seller in consumer product history and significantly influencing popular culture. The transistor paved the way for portability, miniaturization, and better car radios. Later, the invention of the integrated circuit, which organizes numerous transistors and other electronic components on a silicon wafer, took the transistor innovation to a new level and sparked the Information Age.

     Other key contributions of Bell Labs include the publication of "information theory" in 1948, the invention of laser technology in 195 8, and the development of the solar battery and communications satellite by the early 1960s. Bell Labs introduced software-controlled telephone switches long before personal computers, in addition to the first electric microphone for hands-free telephone conversations. Other developments in which Bell Labs researchers assisted included cellular mobile radio, fiber optics, light-emitting diodes, charge-coupled devices (used in cameras), the UNIX operating system, C and C++ programming languages, and High-Definition Television (HDTV).

     For more than 50 years, Bell Telephone Laboratories enjoyed financial support from its parent company AT&T, a regulated monopoly that could pass along research costs to customers. The research approach was primarily academic, with a corporate philosophy of giving topflight researchers freedom and autonomy. Bell Labs focused on being the first or best in such areas as publishing papers, setting transmission records, and building the most powerful laser diode. Eleven of its researchers have been awarded the Nobel Prize, nine have received the National Medal of Science, and seven have received the National Medal of Technology. An Emmy Award was earned for the institution's work on HDTV. Nobel Prize winners include Clinton J. Davisson, who demonstrated the

     wave nature of matter, a foundation for much of today's solid­ state electronics. John Bardeen, Walter H. Brattain, and Will­ iam Shockley were honored with a Nobel Prize in 19 56 for inventing the transistor, and Arno Penzias and Robert Wilson received the Nobel Prize for detecting background radiation supporting the Big Bang theory.

     By the 1980s competitive pressures and then divestiture led AT&T to refocus its research efforts. The terms of a 1956 agreement with the U.S. Department of Justice restricted what use AT&T could make of technologies unrelated to its core telephone business. Bell Labs had to license others to utilize many of its patents-especially the valuable transistor. The court-ordered 1984 break-up of AT&T, however, freed Bell labs to engage in direct marketing as well as licensing of its innovations. Research Director Arno Penzias pushed to bring wide-ranging research projects more in line with the company's telecommunications business. Although there was concern that Bell Labs would suffer without the former cross-subsidies, AT&T pledged to continue its tradition of both primary and applied research. Critics noted, however, the slow but steady decline of fundamental scientific research in favor of more applied work to develop products to meet customer needs.

     Bell Labs experienced a dramatic change in 1996 when AT&T underwent another major restructuring (a trivestiture), giving up 75 percent of its Bell Laboratories staff to its new off-spring, Lucent Technologies. The remaining 25 percent, made up of computer scientists, mathematicians, and other information scientists remained to form the new AT&T Laboratories, supporting the telecommunications provider's businesses in long distance and other services. Some physical science positions were terminated due to the corporate reorganization.

     Bell Labs initially experienced a resurgence under its new parent company, Lucent Technologies, a high-tech company that develops and manufactures telecommunications technology and equipment for AT&T and others. Lucent also gave Bell Labs a higher profile, featuring the research and develop­ ment unit in the company slogan: "Lucent Technologies. Bell Labs Innovations." About 80 percent of Bell Labs employees are part of and integrated into Lucent's business units. The other 20 percent work for what is called the Central Labs, which consist of three major technical divisions: Advanced Technologies, Technology Officer Division, and Research.

     During the 1990s, Bell Labs led the world with more citations than, for example, IBM and top academic institutions. Even today, despite serious cut-backs and reorientation of research priorities, the Labs average better than three patent applications every business day. A number of technologies for the digital audio broadcasting (DAB) market have been patented, including the perceptual audio coding (PAC) algorithm. The PAC encoder converts AM or FM radio signals into high­ quality digital signals and enables the transmission of digital audio over a variety of wireless and wireline channels, including in-band, on-channel (!BOC) systems and the internet.

     At the dawn of the 21st century, Lucent, like most of the telecommunications industry, experienced financial troubles. As a result, Bell Labs lost funding and people, particularly in the physical sciences. Restructuring and streamlining shifted ​​the focus to addressing the needs of communications service providers. There are now two primary operating units, focusing on wireline networks and mobile networks. Web-based customer solutions and service intelligence are emphasized. Bell Labs continues to be Lucent's innovation engine.