<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10 - QSB

    /X/  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 1998

                                       or


    / /   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
              For the transition period from _________ to _________


                        Commission file number  0-28180
                                                -------


                            SPECTRALINK CORPORATION
               (Exact name of registrant as specified in charter)

<TABLE>
<S>                                                                                     <C>       
                           Delaware                                                     84-1141188
(State or other jurisdiction of incorporation or organization)                          (IRS Employer
                                                                                        Identification Number)


5755 Central Avenue, Boulder, Colorado                                                  80301-2848
(Address of principal executive office)                                                 (Zip code)
</TABLE>

                                  303-440-5330
                           (Issuer's telephone number)


              (Former name, former address and former fiscal year,
                          if changed from last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No  
                                       ---     ---

Applicable only to issuers involved in bankruptcy proceedings during the 
preceding five years:  N.A.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes    No    .
                         ---    ---
Applicable only to corporate issuers:
As of September 30, 1998, there were outstanding 19,372,711 shares of
SpectraLink Corporation Common Stock, par value $.01.
Transitional Small Business Disclosure Format (check one):  Yes     No   X
                                                                ---     ---

                                       1
<PAGE>   2




                             SPECTRALINK CORPORATION
                                      INDEX

<TABLE>
<CAPTION>
                                                                                                      Page
<S>               <C>                                                                                <C>
Part I            Financial Information

     Item 1       Financial Statements

                  Balance Sheets at
                  September 30, 1998 and December 31, 1997                                               3

                  Statements of Operations
                  Three months and nine months ended September 30, 1998 and 1997                         4

                  Statements of Cash Flows
                  Nine months ended September 30, 1998 and 1997                                          5

                  Notes to Financial Statements                                                          6

     Item 2       Management's Discussion and Analysis of  Financial Condition and
                  Results of Operations                                                                  8


Cautionary Statement Pursuant to Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995                                                        12


Part II           Other Information

     Item 4       Submission of Matters to a Vote of Security Holders

     Item 6       Exhibits and Reports on Form 8-K

                  (a) Exhibits
                        27 Financial Data Schedule
                  (b) Form 8-K
                        None
</TABLE>


                                       2

<PAGE>   3


                             SPECTRALINK CORPORATION
                                 BALANCE SHEETS
                                 (IN THOUSANDS)


                                     ASSETS
<TABLE>
<CAPTION>
                                                                         SEPTEMBER 30,            DECEMBER 31,
                                                                             1998                    1997
                                                                         -------------            ------------
                                                                          (Unaudited)
<S>                                                                      <C>                      <C> 
CURRENT ASSETS:
   Cash and cash equivalents                                             $   10,677               $   5,674
   Short-term investments                                                    11,955                  12,980
   Trade accounts receivable, net of allowance of $343
      and $354, respectively                                                  8,176                   7,671
   Inventory                                                                  4,745                   4,766
   Other                                                                        705                     554
                                                                         ----------               ---------
          Total current assets                                               36,258                  31,645
                                                                         ----------               ---------

INVESTMENT IN GOVERNMENT SECURITIES                                           3,994                   6,944

PROPERTY AND EQUIPMENT, at cost:
    Furniture and fixtures                                                    1,322                   1,200
    Equipment                                                                 4,203                   3,203
    Leasehold improvements                                                      631                     580
                                                                         ----------               ---------
                                                                              6,156                   4,983
   Less  - Accumulated depreciation                                          (3,186)                 (2,355)
                                                                         ----------               ---------
          Net property and equipment                                          2,970                   2,628
OTHER                                                                            89                      82
                                                                         ----------               ---------
TOTAL ASSETS                                                             $   43,311               $  41,299
                                                                         ==========               =========


                                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                      $    1,192               $     492
   Accrued payroll, commissions, and employee benefits                        1,300                   1,168
   Accrued sales and use tax                                                    574                     358
   Accrued warranty expenses                                                    395                     531
   Other accrued expenses                                                       143                     141
   Deferred revenue                                                           1,209                   1,052
                                                                         ----------               ---------
          Total current liabilities                                           4,814                   3,742
LONG-TERM LIABILITIES                                                           177                     131
                                                                         ----------               ---------
          Total liabilities                                                   4,991                   3,873
                                                                         ----------               ---------

STOCKHOLDERS' EQUITY:
   Common stock                                                                 198                     194
   Additional paid-in capital                                                49,239                  48,803
   Accumulated deficit                                                       (9,777)                (10,547)
   Treasury stock at cost                                                    (1,340)                 (1,024)
                                                                         ----------               ---------
TOTAL STOCKHOLDERS' EQUITY                                                   38,320                  37,426
                                                                         ----------               ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $   43,311               $  41,299
                                                                         ==========               =========
</TABLE>

              The accompanying notes to financial statements are an
                       integral part of these statements.



                                       3
<PAGE>   4


                             SPECTRALINK CORPORATION
                            STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED      NINE MONTHS ENDED
                                                                   SEPTEMBER 30,           SEPTEMBER 30,
                                                               --------------------    --------------------
                                                                  1998       1997        1998        1997
                                                               --------    --------    --------    --------
<S>                                                            <C>         <C>         <C>         <C>     
NET SALES                                                      $  9,567    $  7,002    $ 25,125    $ 20,242
COST OF SALES                                                     4,159       3,213      10,948       9,647
                                                               --------    --------    --------    --------
    Gross profit                                                  5,408       3,789      14,177      10,595

OPERATING EXPENSES
    Research and development                                        967         886       2,801       2,598
    Marketing and selling                                         3,505       2,996      10,132       8,274
    General and administrative                                      516         484       1,546       1,555
                                                               --------    --------    --------    --------
        Total operating expenses                                  4,988       4,366      14,479      12,427
                                                               --------    --------    --------    --------

GAIN (LOSS) FROM OPERATIONS                                         420        (577)       (302)     (1,832)
INVESTMENT INCOME AND OTHER, net                                    356         339       1,121       1,138
                                                               --------    --------    --------    --------
INCOME(LOSS) BEFORE INCOME TAXES                                    776        (238)        819        (694)
INCOME TAX EXPENSE (BENEFIT)                                         47          11          49         (12)
                                                               --------    --------    --------    --------

NET INCOME (LOSS)                                              $    729    $   (249)   $    770    $   (682)
                                                               ========    ========    ========    ========

BASIC EARNINGS (LOSS) PER SHARE (Note 3)                       $   0.04    $  (0.01)   $   0.04    $  (0.03)
                                                               ========    ========    ========    ========

BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                        19,370       19,900     19,230      19,760
                                                               ========    =========   ========    ========

DILUTED EARNINGS (LOSS) PER SHARE (Note 3)                     $   0.04    $   (0.01)  $   0.04    $  (0.03)
                                                               ========    =========   ========    ========

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING                      19,680       19,900     19,720      19,760
                                                               ========    =========   ========    ========
</TABLE>
             The accompanying notes to financial statements are an
                       integral part of these statements.



                                       4

<PAGE>   5

                             SPECTRALINK CORPORATION
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                                                     ------------------------------- 
                                                                                        1998                 1997
                                                                                        ----                 ----
<S>                                                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                                $     770           $     (682)
   Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
         Depreciation and amortization                                                    834                  737
         Loss on sales/disposal of assets                                                  --                   14
         Changes in assets and liabilities
            Increase in accounts receivable, net                                         (505)              (2,648)
            Decrease (increase) in inventory                                               22               (1,387)
            Increase in other assets                                                     (159)                (147)
            Increase in accounts payable                                                  800                   69
            Increase in other accrued liabilities and deferred revenue                    319                1,171
                                                                                    ---------           ----------
Net cash provided by (used in) operating activities                                     2,081               (2,873)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                                                (1,181)              (1,614)
    Proceeds from disposal of property and equipment                                        5                    2
    Purchases of investments                                                           (8,025)             (10,042)
    Maturity of investments                                                            12,000               14,000
    Purchases of treasury stock                                                          (316)                (572)
                                                                                    ---------           ----------
Net cash provided by investing activities                                               2,482                1,774

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on capital lease obligations                                                   --                  (31)
   Proceeds from exercise of incentive common stock options                               175                   27
   Proceeds from sale of common stock                                                     265                  224
                                                                                    ---------           ----------
Net cash provided by financing activities                                                 440                  220
                                                                                    ---------           ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                        5,003                 (879)
CASH AND CASH EQUIVALENTS, beginning of period                                          5,674                7,334
                                                                                    ---------           ----------
CASH AND CASH EQUIVALENTS, end of period                                            $  10,677           $    6,455
                                                                                    =========           ==========
</TABLE>

              The accompanying notes to financial statements are an
                       integral part of these statements.


                                       5

<PAGE>   6

                             SPECTRALINK CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                    UNAUDITED
1.  Basis of Presentation

The accompanying financial statements as of September 30, 1998 and 1997 and for
the quarters and nine months then ended, have been prepared from the books and
records of the Company and are unaudited. In management's opinion, these
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation. Interim results are
not necessarily indicative of results for a full year.

The financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1997 presented in the
Company's filings with the Securities and Exchange Commission. The accounting
policies utilized in the preparation of the financial statements herein
presented are the same as set forth in the Company's annual financial
statements.

New Accounting Pronouncements

          Statement of Financial Accounting Standards No. 131
In 1997, the Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 131 "Disclosures about Segments of
an Enterprise and Related Information," effective for fiscal years beginning
after December 15, 1997. This statement requires that a public company report
financial and descriptive information about its reportable operating segments on
the same basis that is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The Company expects to adopt
SFAS No. 131 for the year ended December 31, 1998, and anticipates that it will
have no material impact on the companies financial position, results of
operations, or cash flows.

          Statement of Financial Accounting Standards No. 133
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" effective for fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. It also requires that
changes in the derivative's fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. Management believes that the
impact of SFAS No. 133 will not have a material impact on the companies
financial position, results of operations, or cash flows.

         Statement of Position 98-5
In April 1998, the AICPA issued Statement of Position ("SOP") 98-5, "Reporting
on the Costs of Start-Up Activities". This statement is effective for financial
statements for fiscal years beginning after December 15, 1998. In general, SOP
98-5 requires costs of start-up activities and organization costs to be expensed
as incurred. Initial application of SOP 98-5 should be reported as the
cumulative effect of a change in accounting principle. Management believes that
adoption of SOP 98-5 will not have a material impact on the companies financial
position, results of operations, or cash flows.

2.  Inventories

Inventories include the cost of raw materials, direct labor and manufacturing
overhead, and are stated at the lower of cost (first-in, first-out) or market.
Inventories at September 30, 1998 and December 31, 1997 consisted of the
following:

<TABLE>
<CAPTION>
                                                     1998             1997
                                                     ----             ----
                                                  (Unaudited)
<S>                                                <C>             <C>    
Raw materials                                      $2,245           $2,529
Work in process                                       155               57
Finished goods                                      2,345            2,180
                                                   ------           ------
                                                   $4,745           $4,766
                                                   ======           ======
</TABLE>



                                       6


<PAGE>   7
                             SPECTRALINK CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998
                                    Unaudited

3.  Earnings per share

Effective December 15, 1997, the Company has adopted the provisions of Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share".
SFAS 128 requires entities to present both Basic Earnings Per Share ("EPS") and
Diluted EPS. Basic EPS excludes dilution and is computed by dividing income
(loss) available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Potential dilution of
securities exercisable into common stock were computed using the treasury stock
method based on the average fair market value of the stock.

<TABLE>
<CAPTION>
                                Three months ended September 30,                        Nine months ended September 30,
                     ------------------------------------------------------- ------------------------------------------------------
                               1998                         1997                       1998                        1997
                     -------------------------- ---------------------------- -------------------------- ---------------------------
                                         Per                         Per                         Per                      Per
                      Income    Shares   Share     Loss    Shares    Share    Income   Shares    Share    Loss   Shares   Share
                      ------    ------   -----    ------   ------    -----    ------   ------    -----    ----   ------   -----
<S>                    <C>      <C>      <C>      <C>      <C>      <C>         <C>    <C>       <C>     <C>     <C>      <C>    
Basic EPS---           $ 729    19,370   $0.04    $(249)   19,900   $(0.01)     $770   19,230    $0.04   $(682)  19,760   $(0.03)
Effect of dilutive
securities:
  Stock purchase plan               20                          0                          80
  Stock options
    outstanding                    290                          0                         410
                     -------- --------- ------- --------- -------- --------- -------- -------- -------- -------- -------- ---------
Diluted EPS---         $ 729    19,680   $0.04    $(249)   19,900   $(0.01)     $770   19,720    $0.04   $(682)  19,760   $(0.03)
                     -------- --------- ------- --------- -------- --------- -------- -------- -------- -------- -------- ---------
</TABLE>

4. Stockholders' Equity

In the third quarter of 1998, the Company purchased zero shares of Treasury
Stock compared to 30,000 shares at a cost of $135,000 in the third quarter of
1997. In the first nine months of 1998, the Company purchased 85,697 shares of
Treasury Stock at a cost of $316,000 compared to 148,500 shares at a cost of
$572,000 in the first nine months of 1997. Of the 1998 year to date shares
purchased, 15,630 unvested shares of restricted stock were repurchased from a
former director of the Company pursuant to a pre-existing agreement, and 23,067
shares were repurchased from a broker and were related to a cashless exercise of
stock options by a former executive officer.



                                       7
<PAGE>   8




                                 PART I - ITEM 2
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                             SPECTRALINK CORPORATION

OVERVIEW

       SpectraLink commenced operations in April 1990 to design, manufacture and
sell unlicensed digital wireless telephone communication systems for businesses.
The Company sold its first commercial system in June of 1992. SpectraLink's
primary sales efforts are currently focused on retail stores, hospitals,
distribution centers, manufacturing facilities, and corporate offices.
SpectraLink sells its systems in the United States and Canada through its direct
sales force, telecommunications equipment resellers, and specialty dealers.

       Since inception, the Company has expended considerable effort and
resources developing its wireless telephone systems, building its direct and
reseller channels of distribution, and managing the effects of rapid growth.
This rapid growth has required it to significantly increase the scale of its
operations, including the hiring of additional personnel in all functional
areas, and has resulted in significantly higher operating expenses. The Company
anticipates that its operating expenses will continue to increase.

RESULTS OF OPERATIONS

        The following table sets forth certain income and expense items as a
percentage of net sales for the periods indicated.

 Statement of Operations Data:
<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED SEPTEMBER 30          NINE MONTHS ENDED SEPTEMBER 30
                                                            -------------------------------          ------------------------------
                                                                 1998               1997                1998                1997
                                                                 ----               ----                ----                ----
<S>                                                             <C>                 <C>                 <C>                 <C>   
    Net Sales                                                   100.0%              100.0%              100.0%              100.0%
    Cost of Sales                                                43.5%               45.9%               43.6%               47.7%
    Gross Profit                                                 56.5%               54.1%               56.4%               52.3%
    Operating Expenses:
      Research and Development                                   10.1%               12.7%               11.1%               12.8%
      Marketing and Selling                                      36.6%               42.8%               40.3%               40.9%
      General and Administrative                                  5.4%                6.9%                6.2%                7.7%
    Total Operating Expenses                                     52.1%               62.4%               57.6%               61.4%
    Income (Loss) from Operations                                 4.4%               (8.2%)              (1.2%)              (9.1%)
    Investment Income and Other, net                              3.7%                4.8%                4.5%                5.6%
    Income (Loss) Before Income Taxes                             8.1%               (3.4%)               3.3%               (3.4%)
    Income Tax Expense (Benefit)                                  0.5%                0.2%                0.2%               (0.1%)
    Net Income (Loss)                                             7.6%               (3.6%)               3.1%               (3.4%)
</TABLE>



                                       8

<PAGE>   9

                             SPECTRALINK CORPORATION
           QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

Net Sales. The Company derives its revenue principally from the sale,
installation and service of wireless, on-premises telephone systems. Net sales
increased by 37% to $9,567,000 in the third quarter of 1998 from $7,002,000 in
the third quarter of 1997. This sales increase was the result of increased
penetration of the healthcare and retail markets. Net sales for the nine months
ended September 30, 1998 increased by 24% to $25,125,000 from $20,242,000 for
the comparable nine months in 1997. The increase in sales for the nine month
period was mainly due to increases in retail, healthcare, and commercial sales.

Gross Profit. The Company's cost of sales consists primarily of direct material,
direct labor, service expenses and manufacturing overhead. Gross profit
increased by 43% to $5,408,000 in the third quarter of 1998 from $3,789,000 in
the third quarter on 1997. For the nine months ended September 30, 1998 gross
profit increased by 34% to $14,177,000 from $10,595,000 for the same period last
year. The Company's gross profit margin (gross profit as a percentage of net
sales) increased to 56.5% in the third quarter of 1998 from 54.1% in the third
quarter of 1997. The increase in gross profit margin was the result of an
improvement in manufacturing efficiencies and a reduction in the provision for
warranty expenses. For the nine months ended September 30, 1998, gross profit
margin increased to 56.4% from 52.3% in the same period last year. The increases
in gross profit margin for the nine months were primarily due to reduced
warranty costs, and material cost reductions from volume buying and design
improvements. Factors increasing gross margin were somewhat offset in the
quarter ended and the nine months ended by decreases in the average unit sales
price.

Research and Development. Research and development expenses consist primarily of
employee costs, professional services, and supplies necessary to develop,
enhance and reduce the cost of the Company's systems. Research and development
expenses increased by 9.1% to $967,000 in the third quarter of 1998 from
$886,000 in the third quarter of 1997, representing 10.1% and 12.7%,
respectively, of net sales. Research and development efforts in the third
quarter of 1998 were primarily associated with new products. In the third
quarter of 1997, research and development efforts were associated with the
introduction of new products and development of new digital interfaces to
existing PBX systems. For the nine months ended September 30, 1998 research and
development increased by 7.8% to $2,801,000 from $2,598,000 for the same period
last year, representing 11.1% and 12.8% , respectively, of net sales. The
Company expects to increase its current level of spending on research and
development.

Marketing and Selling. Marketing and selling expenses consist primarily of
salaries and other expenses for personnel, commissions, travel, advertising,
trade shows, and market research. Marketing and selling expenses increased by
17.0% to $3,505,000 in the third quarter of 1998 from $2,996,000 in the third
quarter of 1997, representing 36.6% and 42.8%, respectively, of net sales. For
the nine months ended September 30, 1998, sales and marketing expenses increased
by 22.4% to $10,132,000 from $8,274,000 for the same period last year,
representing 40.3% and 40.9%, respectively, of net sales. The increase was
primarily the result of the addition of sales personnel to increase market
penetration and increased commission expenses.

General and Administrative. General and administrative expenses consist
primarily of salaries and other expenses for management, finance, accounting,
contract administration, order processing, and human resources, as well as legal
and other professional services. General and administrative expenses increased
by 6.6% to $516,000 in the third quarter of 1998 from $484,000 in the third
quarter of 1997, representing 5.4% and 6.9%, respectively, of net sales. For the
nine months ended September 30, 1998, general and administrative expenses
decreased by 0.6% to $1,546,000 from $1,555,000 for the same period last year,
representing 6.2% and 7.7%, respectively, of net sales. The reduction in expense
dollars was the result of lower outside services and projected costs for the
publication of the annual report for 1998. The decrease as a percentage of sales
was the result of economies of scale resulting from increased sales.

Investment Income and Other (Net). Investment income is the result of the
Company's investments in money market, investment-grade debt securities, and
government securities. Other income is generated primarily from purchase
discounts. Investment income and other increased by 5% to $356,000 in third
quarter of 1998 from $339,000 in the third quarter of 1997. For the nine months
ended September 30, 1998 investment income and other decreased by 1.5% to
$1,121,000 from $1,138,000 for the same period last year. The reduction in
investment income and other was primarily the result of lower cash and
short-term investments.

Income Tax. The Company has available tax loss carryforwards to offset estimated
1998 taxable income. The Company's tax provision in 1998 consists of an accrual
for state and federal alternative minimum taxes estimated at 6% of taxable
income.

Expansion Risk. The Company's operating expenses are based in part on its
expectations of future sales, and the Company's expense levels are generally
committed in advance of sales. The Company currently plans to continue to expand
and increase its operating expenses in an effort to generate and support
additional future revenue. If sales do not materialize in a quarter as expected,
the Company's results of operations for that quarter would be adversely
affected. Net income may be disproportionately affected by a reduction of
revenues because only a small portion of the Company's expenses vary with its
revenue.
                                       9
<PAGE>   10




                             SPECTRALINK CORPORATION
                  NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

LIQUIDITY AND CAPITAL RESOURCES

Operating activities provided net cash of $2,081,000 in the nine months ended
September 30, 1998, and used net cash of $2,873,000 in the comparable period
last year. For the nine months ended September 30, 1998, accounts receivable
increased by $505,000, while inventory decreased by $22,000. The increase in
accounts receivable was primarily due to increased sales. The decrease in
inventory was due to more emphasis on inventory control. Other accrued
liabilities and deferred revenue increased by $319,000 compared to an increase
of $1,171,000 for the same period last year. This year's increase was mainly
attributable to an increase in deferred revenue from maintenance contracts;
however, partially offsetting this increase was a decrease in accrued warranty.
Investing activities included property and equipment acquisitions of
manufacturing equipment, manufacturing tooling, engineering equipment, and
computer software of $1,181,000 in the nine months ended September 30, 1998.
Property and equipment acquisitions in the same period for last year were
$1,614,000 and consisted of modular office furniture, manufacturing equipment,
leasehold improvements, computer equipment and software. Investment purchases in
the nine months ended September 30, 1998 were $8,025,000, compared to
$10,042,000 for the nine months ended September 30, 1997. Investments maturing
in the nine months ended September 30, 1998 were $12,000,000, while $14,000,000
matured in the nine months ended September 30, 1997. On February 26, 1997, the
board of directors authorized the Company to repurchase up to 500,000 shares of
the Company's common stock through open market transactions. As of September 30,
1998, the Company had acquired 374,197 shares of the Company's common stock at a
cost of $1,340,000. In the nine months ended September 30, 1998, financing
activities included proceeds of $175,000 from the issuance of common stock from
the exercise of stock options and $265,000 from the issuance of stock under the
provisions of the Employee Stock Purchase Plan. Of the $175,000 from the
exercise of stock options, $108,000 was from the exercise of stock options by a
former executive officer. In the nine months ended September 30, 1997, financing
activities consisted of proceeds of $27,000 from the issuance of common stock
from the exercise of stock options and $224,000 from the issuance of stock under
the provisions of the Employee Stock Purchase Plan. There were also payments on
capital lease obligations of $31,000 in the nine months ended September 30,
1997.

As of September 30, 1998, the Company had working capital of $31,444,000
compared to $27,903,000 as of December 31, 1997. Working capital as of September
30, 1998 included $22,632,000 in cash and short-term investments, $8,176,000 in
accounts receivable and $4,745,000 in inventory. As of September 30, 1998, the
Company's current ratio (ratio of current assets to current liabilities) was
7.5:1, compared with a current ratio of 8.5:1 as of December 31, 1997. In
addition the Company has invested $3,994,000 in government securities which have
maturities greater than 12 months; however no maturity exceeds 24 months.

The Company believes that its current resources and cash generated from
operations will be sufficient to fund necessary capital expenditures, to provide
adequate working capital and to finance the Company's expansion for at least the
immediate future.

On November 4, 1998, the Board of Directors has authorized the repurchase of up
to one million shares of its common stock. This authorization brings the total
of shares authorized to be repurchased to one and a half million, of which
729,197 shares have already been repurchased as of November 6, 1998.

YEAR 2000 COMPLIANCE

Many existing computer systems, applications software, and other control
devices, rely on only two digits to identify the year, without considering the
impact of the upcoming change in the century. As a result, such systems and
applications could fail or create erroneous results unless corrected so that
they can process data related to the year 2000 and beyond. The Company relies on
information technology systems, applications and devices in operating and
monitoring all major aspects of its business, including financial systems (such
as general ledger, payroll and accounts payable modules), customer service,
manufacturing, infrastructure, embedded computer chips, networks,
telecommunications equipment and end products. The Company also relies, directly
or indirectly, on the external systems, software and devices of business
enterprises such as customers, suppliers, utilities, creditors, financial
organizations, consultants, and governmental entities, both domestic and
international, for accurate exchange of data.

The Company feels that it is taking reasonable steps to catalog and address
those matters in both its information technology systems and in other equipment
with embedded microprocessors that could cause a serious breach in its business
and operations due to Year 2000 issues. Specifically, with respect to its
information technology systems, the Company has assessed each item of software
and has completed 5% of the remediation necessary for such information
technology systems to be Year 2000 compliant. With respect to non-information
technology systems (such as the Company's telephone systems and security
system), the Company has completed approximately 20% of the assessment. The
Company also intends to test selected items to assure the integrity of the
Company's remediation programs. All testing is expected to be completed by June
30, 1999. At this point, the Company believes that all of its mission-critical


                                       10
<PAGE>   11

information technology and non-information technology systems will be Year 2000
compliant on time. However, delays in the implementation of remediation programs
for non-compliant systems or a failure by the Company to fully identify all Year
2000 dependencies in the Company's systems could have a material adverse effect
on the Company's business, financial condition and results of operations.

The Company is also communicating with its major customers (including its
distributors), suppliers and financial institutions to assess the potential
impact on the Company's operations of such third parties failure to become Year
2000 compliant. This process has not been completed; based upon responses to
date, it appears that many of the Company's customers and suppliers have only
indicated that they have in place Year 2000 readiness programs, without
specifically representing that they will be Year 2000 compliant in a timely
manner. A failure by any of the Company's major customers or suppliers to be
Year 2000 compliant, or a failure by the Company to fully identify its
dependencies on the information technology systems of certain suppliers or
customers could have a material adverse effect on the Company's business,
financial condition and results of operations. For example, the Company would
experience a material adverse impact on its business if significant suppliers of
electrical component parts, semi-conductors, printed circuit boards, other raw
materials or telecommunications systems fail to provide the Company in a timely
manner with necessary inventories or services due to Year 2000 systems failures.
Likewise, if the Company's customers are unable to process purchase orders,
payment checks, or other mission critical paperwork due to Year 2000 problems,
SpectraLink's business, financial condition and results of operations could be
materially adversely affected.

The Company's Year 2000 program includes developing contingency plans to protect
its business and operations from Year 2000-related interruptions from third
party non-compliance. The Company expects to complete its risk assessment and
contingency plan by June 30, 1999. The plans are expected to include back-up
procedures, identification of alternate suppliers (where possible), and
increases in back-up inventory levels. Based upon its current assessment of its
own information and non-information technology systems, the Company does not
believe it necessary to develop an extensive contingency plan for those systems.
There can be no assurances, however, that any of the Company's contingency plans
will be sufficient to handle all problems or issues which may arise.

The costs incurred to date related to its Year 2000 activities have not been
material to the Company, and, based upon current estimates, the Company does not
believe that the total cost of preparing for Year 2000 programs will have a
material adverse impact on the Company's results of operations or financial
condition.

The statements set forth herein concerning Year 2000 issues which are not
historical facts, are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. In particular, the costs associated with the
Company's Year 2000 programs and the time-frame in which the Company plans to
complete Year 2000 modifications are based upon management's best estimates.
These estimates were developed from internal assessments and assumptions of
future events. These estimates may be adversely affected by the scarcity of
personnel and system resources, and by the failure of significant third parties
to properly address Year 2000 issues. Therefore, there can be no guarantee that
any estimates, or other forward-looking statements will be achieved, and actual
results could differ significantly from those contemplated.



                                       11
<PAGE>   12

     CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
                    SECURITIES LITIGATION REFORM ACT OF 1995
                             SPECTRALINK CORPORATION


Certain statements in this Quarterly Report on Form 10-QSB, as well as
statements made by the Company in periodic press releases, oral statements made
by the Company's officials to analysts and stockholders in the course of
presentations about the Company and conference calls following quarterly
earnings releases, constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Caution
should be taken not to place undue reliance on any such forward-looking
statements since such statements speak only as of the date of the making of such
statements and involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such factors include,
among other things, (i) the failure of the market for on-premises wireless
telephone systems to grow or to grow as quickly as the Company anticipates, (ii)
the intensely competitive nature of the wireless communications industry, (iii)
the ability of the Company and its resellers to develop and execute effective
marketing and sales strategies, (iv) the Company's reliance on sole or limited
sources of supply for many components and equipment used in its manufacturing
process, (v) the risk of business interruption arising from the Company's
dependence on a single manufacturing facility, (vi) the Company's dependence on
a single product line, (vii) the Company's ability to manage potential expansion
of operations, (viii) the Company's ability to attract and retain key personnel,
(ix) the Company's ability to respond to rapid technological changes within the
on-premises wireless telephone industry, (x) changes in rules and regulations of
the FCC, (xi) the Company's ability to protect its intellectual property rights,
(xii) the assertion of intellectual property infringement claims against the
Company, (xiii) changes in economic and business conditions affecting the
Company's customers, (xiv) potential business interruptions associated with the
year 2000 issue, (xv) other factors over which the Company has little or no
control, and (xvi) potential fluctuations in the Company's future operating
results. The Company has experienced, and may in the future continue to
experience, significant quarterly fluctuations in revenue, gross margins and
operating results due to numerous factors, some of which are outside the
Company's control. These factors include (a) fluctuating market demand for, and
declines in the average selling prices of, the Company's products, (b) the
timing of and delay of significant orders from customers, and (c) seasonality in
demand. Historically, the Company has not operated with a significant order
backlog and a substantial portion of the Company's revenue in any quarter has
been derived from orders booked and shipped in that quarter. Accordingly, the
Company's revenue expectations are based almost entirely on its internal
estimates of future demand and not on firm customer orders. Planned expense
levels are relatively fixed in the short term and are based in large part on
these estimates, and if orders and revenue do not meet expectations, the
Company's operating results could be materially adversely affected. In addition,
due to the timing of orders from customers, the Company has often recognized a
substantial portion of its revenue in the last month of a quarter. As a result,
minor fluctuations in the timing of orders and the shipment of products may, in
the future, cause operating results to vary significantly from quarter to
quarter. It is possible that due to such fluctuations or other factors, the
Company's future operating results could be below the expectations of securities
analysts and investors. In such an event, or in the event that adverse market
conditions prevail or are perceived to prevail either generally or with respect
to the Company's business, the price of the Company's common stock would likely
be materially adversely affected.


                                       12
<PAGE>   13



                             SPECTRALINK CORPORATION





<TABLE>
<CAPTION>
                                                                                                      Page
<S>               <C>                                                                                 <C>
Part II           Other Information

     Item 4       Submission of Matters to a Vote of Security Holders                                   15

     Item 5       Other Information

     Item 6       Exhibits and Reports on Form 8-K

                  (a)  Exhibits
                         27  Financial Data Schedule                                                    16

                  (b)  Reports on Form 8-K
                       No reports on Form 8-K were filed during the quarter
                       for which this report is filed.
</TABLE>



                                       13



<PAGE>   14



                             SPECTRALINK CORPORATION
                                   SIGNATURES


In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                     SPECTRALINK CORPORATION


Date:  November  13, 1998            By: /s/  WILLIAM R. MANSFIELD
                                         ---------------------------------------
                                     William R. Mansfield,
                                     Principal Financial and Accounting Officer
                                     and on behalf of the Registrant




                                       14
<PAGE>   15



                             SPECTRALINK CORPORATION
                                  EXHIBIT INDEX




Exhibit #         Exhibit
---------         --------
27                27  Financial Data Schedule                              16



                                       15