The Bell team made many attempts to build such a system with various tools, but generally failed. Setups where the contacts were close enough were invariably as fragile as the original cat's whisker detectors had been, and would work briefly, if at all. Eventually they had a practical breakthrough. A piece of gold foil was glued to the edge of a plastic wedge, and then the foil was sliced with a razor at the tip of the triangle. The result was two very closely spaced contacts of gold. When the plastic was pushed down onto the surface of a crystal and voltage applied to the other side (on the base of the crystal), current started to flow from one contact to the other as the base voltage pushed the electrons away from the base towards the other side near the contacts. The point-contact transistor had been invented.
While the device was constructed a week earlier, Brattain's notes describe the first demonstration to higher-ups at Bell Labs on the afternoon of December 23, 1947, often given as the birth date of the transistor. The "PNP point-contact germanium transistor" operated as a speech amplifier with a power gain of 18 in that trial. Known generally as a point-contact transistor today, John Bardeen, Walter Houser Brattain, and William Bradford Shockley were awarded the Nobel Prize in physics for their work in 1956.
Origin of the term "transistor"
Bell Telephone Laboratories needed a generic name for their new invention: "Semiconductor Triode, " "Solid Triode, " "Surface States Triode" [sic], "Crystal Triode" and "Iotatron" were all considered, but "transistor, " coined by John R. Pierce, won an internal ballot. The rationale for the name is described in the following extract from the company's Technical Memoranda (May 28, 1948)  calling for votes:
Transistor. This is an abbreviated combination of the words "transconductance" or "transfer, " and "varistor." The device logically belongs in the varistor family, and has the transconductance or transfer impedance of a device having gain, so that this combination is descriptive.
Improvements in transistor design
Shockley was upset about the device being credited to Brattain and Bardeen, who he felt had built it "behind his back" to take the glory. Matters became worse when Bell Labs lawyers found that some of Shockley's own writings on the transistor were close enough to those of an earlier 1925 patent by Julius Edgar Lilienfeld that they thought it best that his name be left off the patent application.
Shockley was incensed, and decided to demonstrate who was the real brains of the operation. Only a few months later he invented an entirely new type of transistor with a layer or 'sandwich' structure. This new form was considerably more robust than the fragile point-contact system, and would go on to be used for the vast majority of all transistors into the 1960s. It would evolve into the bipolar junction transistor.
With the fragility problems solved, a remaining problem was purity. Making germanium of the required purity was proving to be a serious problem, and limited the number of transistors that actually worked from a given batch of material. Germanium's sensitivity to temperature also limited its usefulness. Scientists theorized that silicon would be easier to fabricate, but few bothered to investigate this possibility. Gordon Teal was the first to develop a working silicon transistor, and his company, the nascent Texas Instruments, profited from its technological edge. Germanium disappeared from most transistors by the late 1960s.