A telephone having a handset and a cradle therefor. The cradle has no external moving parts. A magnet and a magnetic reed switch are used for sensing on-hook and off-hook conditions. In a first embodiment the magnetic reed switch is provided inside the cradle, in a position which is proximate the earpiece end of the handset when the handset is resting on the cradle; the earpiece houses the magnetic for operating the switch. The earpiece of the handset houses a receiver member which includes a loudspeaker having a voice coil wound on a permanent magnet. If that magnet does not generate a magnetic field strong enough to be sensed by and to actuate (i.e., close) the reed switch when the handset is on the cradle, an additional magnet may be used to supplement the magnetic field strength. In a second embodiment, the positions of the magnet and the switch are reversed - i.e., the magnet is placed in the cradle and the magnetic switch is in the handset. As an alternative to magnetic field sensing, optical sensing may be employed, with LED's in the cradle and an optical detector in the handset, or vice-versa.