Edison had previously concentrated on producing phonograph cylinders but decided to get into the disc market due to the increasing market share of disc sound recordings, especially the discs of companies such as Victor Talking Machine Company (what would later be called "78 records"). Victor and most other disc record companies used side to side or lateral motion of the stylus in the record groove, whereas in the Edison system the movement was up and down or vertical, as in a cylinder record.
An Edison Disc Phonograph is distinguished by the diaphragm of the reproducer being located parallel to the disc surface. The Victor (or similar) diaphragm is located at a right angle to the surface of the disc.
The grooves on an Edison Disc are smooth on the sides and have a variable depth. Standard lateral discs will have a more constant depth, but the sides of the groove are scalloped.
Victor's system could not play Edison Discs satisfactorily, and the Edison system could not play Victor or other lateral discs unless one used special equipment.
The Edison records had their greatest commercial success in the mid to late 1910s, and arguably had better audio fidelity but were more expensive than and incompatible with other brands of records, so they ultimately lost out in the marketplace.