The loudspeaker contains a cylindrical coil which is free to move in a radial magnetic field set up by a strong cylindrical permanent magnet.
The magnet has the central South Pole and the surrounding North Pole. The field lines are therefore radial and at right angles to the turns of the coil.
When varying the current flows through the coil, a force of varying magnitudes will act on the coil. This will cause the coil to move to and fro according to the magnitude of the force.
The paper cone then vibrates to produce sound waves.