Western Electric, the equipment division of the Bell System, was the major manufacturer of telephones and telephone-related equipment in the United States for almost a century. Incorporated in 1872  by Elisha Gray and Enos M. Barton (who got their start together in 1869 in Cleveland), the Chicago-based company manufactured a wide range of electrical hardware, including telegraph equipment, bells, signal boxes, and fire alarms. In 1877, the firm shifted gears to produce telephone equipment for Western Union, but that alliance lasted only two years, halted by a patent-infringement lawsuit filed by the Bell Company. Western Electric tried to get back into the telephone business though the majority purchase of a Bell manufacturer called Gilliland Electric Co., but by 1882, the Bell Company itself had become the majority owner of Western Electric, which, in 1925, spun off all its non-telephone hardware products as Graybar, named in honor of Gray and Barton.

While Western Electric supplied Bell with a variety of wooden wall phones and candlestick styles from the end of the 19th to the beginning of the 20th centuries, its first major innovation was the model A1, introduced in 1925. The A1 had a round brass base, an aluminum-alloy cradle and plunger, and a handset made partly of Bakelite and featuring both an earpiece and voice transmitter. Although this type of handset technology had been around since the turn of the century and was particularly popular in Europe, the A1 was the first major U.S. cradle phone to incorporate it. In 1927, the company introduced an improved version of its cradle phone called the B1, which was produced in a 102 version (a sidetone handset, in which both the caller's voice and the recipient's voice was routed into the earpiece) and a 202 version (an anti-sidetone phone with more sophisticated circuitry).

In 1930, the company introduced its oval-base D1 model, which is usually referred to as the 202 since the anti-sidetone version of the phone was so common. The 202 was Western El...ectric's workhorse telephone throughout the 1930s, and many families relied on them through World War II due to limitations on new consumer products (manufacturers like Western Electric retooled to support the war effort). For those customers, Western Electric frequently swapped out the old E1 model handsets on their 202 phones for newer F1 handsets, which were designed by Henry Dreyfuss in 1936 for an entirely new telephone model, the 302.