The discovery that tapping on the chest and listening to the sounds made could give information about internal organs such as the beating of the heart or the breathing in the lungs was made by the Austrian, Leopold Auenbrugger, in the 18th Century and popularized by the Frenchman, Jean Nicolas Corvisart, from 1801.
This realization that internal sounds could be used as an aid to diagnosis by physicians led to a technological need for a listening device that could provide louder, clearer sound information than could be achieved by the physician simply placing his ear against the chest of the patient.
This led to the 1816 invention of the first stethoscope by the French physician Rene Theophile Hyacinthe Laennec. The word stethoscope, he derived from the Greek words stethos, which means breast, and skopeo, which means look at.
His first attempt was basically just a paper tube but later on he came up with a foot long wooden stethoscope. These early designs were monaural, with a single ear-piece. They were very much reminiscent of the ear trumpets which were in common usage at the time as an early example of a hearing aid.
The binaural stethoscope, which consisted of two ear-pieces, was invented by Arthur Leared in 1851. The following year the flexible version of the basic stethoscope design that we still use today was invented by George Cammann. He accompanied this with a significant treatise, demonstrating diagnostic advances that were now made possible because of the new invention.
Differential stethoscopes, which used sound from several locations simultaneously to create a stereo effect, were possible by 1873, but have never caught on. The standard stethoscope that we use today is derived from that designed in the 1940s by Rappaport and Sprague.
This product went through several changes of ownership over the years, with the original designers passing it on to Hewlett-Packard, whose medical division became Agilent Technologies. This division was then sold to Philips, becoming Philips Medical Systems. The original design of Rappaport and Sprague was only retired in 2004.
A number of more subtle changes have happened to the stethoscope over the years. David Littmann, for example, produced a lighter model in the 1960s that also had improved acoustics. In the late 70s Littmann also introduced a tunable diaphragm. More recently (1999), Richard Deslauriers introduced a stethoscope that reduced external noise. Meanwhile Marc Werbuld has recently has provided a design that cancels acoustic noise and reduces neck strain.