<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                             ----------------------
                                    FORM 10-Q
(Mark One)

        [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended June 30, 1998

                                       OR

      [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

For the transition period from  Not Applicable  to   
                                --------------       ------------------

         Commission file number     1-6016
                                    ------


                               ALLEN TELECOM INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

   Delaware                                          38-0290950
--------------------------------------------------------------------------------
(State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
Incorporation or Organization)

25101 Chagrin Boulevard, Suite 350, Beachwood, Ohio           44122
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                    (Zip Code)

(Registrant's Telephone Number, Including Area Code)     (216) 765-5818
                                                         --------------

                                 NOT APPLICABLE
--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since 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 
                                                             ----       ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock:

<TABLE>
<CAPTION>
                                                    Outstanding at
         Class of Common Stock                      July 31, 1998
         ---------------------                      -------------

<S>      <C>                                        <C>       
         Par value $1.00 per share                  27,396,179
                                                    ----------
</TABLE>





<PAGE>   2



                               ALLEN TELECOM INC.
                               ------------------

                                TABLE OF CONTENTS
                                -----------------


<TABLE>
<CAPTION>
                                                                     Page
                                                                      No.
                                                               -----------------
PART I. FINANCIAL INFORMATION:

<S>                                                                 <C>
        ITEM 1 - FINANCIAL STATEMENTS:

             CONSOLIDATED CONDENSED BALANCE SHEETS -
                 June 30, 1998 and December 31, 1997                   3

             CONSOLIDATED CONDENSED STATEMENTS OF
                 INCOME - Six and Three Months Ended
                 June 30, 1998 and 1997                                4

             CONSOLIDATED CONDENSED STATEMENTS OF
                 CASH FLOWS - Six Months Ended
                 June  30, 1998 and 1997                               5

             CONSOLIDATED CONDENSED STATEMENTS OF
                 STOCKHOLDERS' EQUITY - Six Months Ended
                 June 30, 1998 and 1997                                6

             NOTES TO CONSOLIDATED CONDENSED
                 FINANCIAL STATEMENTS                                7 - 9

        ITEM 2 - MANAGEMENT'S DISCUSSION AND
                 ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS                          10 - 13

        ITEM 3 - QUANTITATIVE AND QUALITATIVE
                 DISCLOSURES ABOUT MARKET RISK                        14

PART    OTHER INFORMATION:
II.

        ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
                 SECURITY HOLDERS                                   14 - 15

        ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                     15

        SIGNATURES                                                    16

        EXHIBIT INDEX                                                 17
</TABLE>


                                        2


<PAGE>   3



                         PART I - FINANCIAL INFORMATION
                         ------------------------------
                          ITEM 1 - FINANCIAL STATEMENTS
                          -----------------------------
                               ALLEN TELECOM INC.
                               ------------------
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                      -------------------------------------
                             (Amounts in Thousands)

<TABLE>
<CAPTION>
                                                               June 30,  December 31,
                                                                1998         1997
                                                              ---------   ---------
                                                             (Unaudited)
<S>                                                           <C>         <C>      
ASSETS:
   Current Assets:
      Cash and equivalents                                    $  22,069   $  30,775
      Accounts receivable (less allowance for doubtful
         accounts of $2,129 and $1,934, respectively)           102,950     105,714

      Inventories: Raw materials                                 47,067      49,583
                   Work in process                               23,387      24,505
                   Finished goods                                23,694      19,680
                                                              ---------   ---------
          Total inventories (net of reserves)                    94,148      93,768
                                                              ---------   ---------
      Assets of discontinued emissions testing business             881       1,034
      Other current assets (Note 2)                              21,163      10,745
                                                              ---------   ---------
             Total current assets                               241,211     242,036
                                                              ---------   ---------

   Property, plant and equipment, net                            58,671      60,543
   Excess of cost over net assets of businesses acquired        125,240     126,923
   Assets of discontinued emissions testing business             32,645      32,329
   Other assets (Note 2)                                         35,703      52,602
                                                              ---------   ---------
         TOTAL ASSETS                                         $ 493,470   $ 514,433
                                                              =========   =========
LIABILITIES:
   Current Liabilities:
      Notes payable and current maturities of long-term
         obligations                                          $   4,175   $   6,119
      Accounts payable                                           42,782      75,195
      Accrued expenses                                           33,901      35,261
      Income taxes payable                                       10,283      13,197
      Deferred income taxes                                       1,232       1,249
                                                              ---------   ---------
            Total current liabilities                            92,373     131,021
                                                              ---------   ---------
   Long-term debt                                               131,777      97,915
   Deferred Income Taxes                                          2,315       6,818
   Other liabilities                                             18,632      17,857
                                                              ---------   ---------
         TOTAL LIABILITIES                                      245,097     253,611
                                                              ---------   ---------
STOCKHOLDERS' EQUITY
   Common stock                                                  29,751      29,746
   Paid-in capital                                              180,783     180,538
   Retained earnings                                             65,295      70,091
   Accumulated other comprehensive income (loss)                 (8,326)        207
   Less: Treasury stock (at cost)                               (16,768)    (16,992)
             Unearned compensation                               (2,362)     (2,768)
                                                              ---------   ---------
     TOTAL STOCKHOLDERS' EQUITY                                 248,373     260,822
                                                              ---------   ---------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 493,470   $ 514,433
                                                              =========   =========
</TABLE>

See accompanying notes to the Consolidated Condensed Financial Statements.

                                        3


<PAGE>   4



                               ALLEN TELECOM INC.
                               ------------------
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended            Six Months Ended
                                                                June 30,                      June 30,
                                                        ------------------------      ------------------------
                                                           1998           1997           1998           1997
                                                        ---------      ---------      ---------      ---------


<S>                                                     <C>            <C>            <C>            <C>      
SALES                                                   $  98,013      $ 108,859      $ 211,382      $ 211,362
                                                        ---------      ---------      ---------      ---------

Costs and expenses:
   Cost of sales (Note 4)                                 (80,351)       (70,677)      (157,972)      (136,639)
   Selling, general and
     administrative expenses (Note 4)                     (20,601)       (16,866)       (36,908)       (33,019)
   Research and development and
     product engineering costs                             (8,221)        (7,611)       (15,846)       (14,297)

Other income (loss), net (Note 2)                          (3,505)           700         (2,341)         2,225

Interest expense                                           (2,087)          (926)        (3,651)        (1,732)
Interest income                                               288            177            664            463
                                                        ---------      ---------      ---------      ---------

Income (loss) before taxes and
    minority interests                                    (16,464)        13,656         (4,672)        28,363

(Provision) Benefit for income taxes                        5,876         (5,120)         1,158        (11,300)
                                                        ---------      ---------      ---------      ---------

Income (loss) before minority
    interests                                             (10,588)         8,536         (3,514)        17,063

Minority interests                                           (546)        (1,802)        (1,282)        (3,303)
                                                        ---------      ---------      ---------      ---------

NET INCOME (LOSS)                                       $ (11,134)     $   6,734      $  (4,796)     $  13,760
                                                        =========      =========      =========      =========

EARNINGS (LOSS) PER COMMON SHARE, BASIC AND DILUTED
                                                        ($    .41)     $     .25      ($    .18)     $     .51
                                                        =========      =========      =========      =========

Weighted average common shares outstanding:
    Basic                                                  27,180         26,830         27,160         26,740
    Assumed exercise of stock options                         180            390            220            390
                                                        ---------      ---------      ---------      ---------
    Diluted                                                27,360         27,220         27,380         27,130
                                                        =========      =========      =========      =========
</TABLE>

See accompanying notes to the Consolidated Condensed Financial Statements.



                                        4

<PAGE>   5



                               ALLEN TELECOM INC.
                               ------------------
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                             (Amounts in Thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                              Six Months Ended
                                                                                  June 30,
                                                                     ----------------------------------
                                                                         1998                  1997
                                                                     ------------          ------------

<S>                                                                  <C>                   <C>         
Cash (used) provided by operating activities                         $     (2,055)         $     13,192
                                                                     ------------          ------------

Cash flows from investing activities:
    Investments in telecommunications companies                           (28,271)              (30,989)
    Capital expenditures                                                   (7,634)              (11,465)
    Sales and retirements of fixed assets                                      18                   919
    Capitalized software product costs                                     (2,488)               (2,867)
    Sale of investment                                                        664                   505
                                                                     ------------          ------------
    Cash used by investing activities                                     (37,711)              (43,897)
                                                                     ------------          ------------

Cash flows from financing activities:
    Proceeds from borrowings                                               32,935                30,828
    Treasury stock sold to employee benefit plans                             894                   897
    Exercise of stock options                                                 123                   243
                                                                     ------------          ------------
    Cash provided by financing activities                                  33,952                31,968
                                                                     ------------          ------------

Net cash used by discontinued
     centralized emissions testing business                                (1,308)                 (700)
                                                                     ------------          ------------

Net cash (used) provided                                                   (7,122)                  563

Effect of exchange rate changes on cash                                    (1,584)               (1,856)

Cash and equivalents at beginning of year                                  30,775                23,879
                                                                     ------------          ------------
Cash and equivalents at end of period                                $     22,069          $     22,586
                                                                     ============          ============

Supplemental cash flow data:
      Depreciation and amortization included in "Cash (used)
            provided by operating activities"                        $     11,707          $     10,154
      Interest capitalized                                                    286                   110
      Cash paid during the period for:
            Interest                                                        3,775                 1,412
            Income taxes                                                    8,487                 3,813
</TABLE>




See accompanying notes to the Consolidated Condensed Financial Statements.


                                        5


<PAGE>   6



                               ALLEN TELECOM INC.
                               ------------------
            CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
            ---------------------------------------------------------
                             (Amounts in Thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                                                                                         Other
                                                                       Comprehensive     Retained    Comprehensive   Common   
                                                              Total    Income (Loss)     Earnings    Income (Loss)    Stock   
                                                           -------------------------------------------------------------------
<S>                                                        <C>           <C>           <C>           <C>           <C>        
FOR THE SIX MONTHS ENDED JUNE 30, 1998:

Beginning Balance, January 1, 1998                         $ 260,822                   $  70,091     $     207     $  29,746  
Comprehensive Income (loss):
  Net loss                                                    (4,796)    $  (4,796)       (4,796)
                                                                         ---------
  Other comprehensive loss:
    Unrealized gain on securities recorded to income          (9,588)       (9,588)
    Less:  Tax on unrealized loss on securities                4,027         4,027
                                                           ---------     ---------
      Net:  Unrealized loss on securities                     (5,561)       (5,561)
    Foreign currency translation adjustments                  (2,972)       (2,972)
                                                                         ---------
    Other comprehensive loss                                                (8,533)                     (8,533)
                                                                         ---------
    Comprehensive loss                                                   $ (13,329)
                                                                         =========
Exercise of stock options                                        124                                                      25    
Treasury stock reissued                                          869                                                          
Restricted stock, net                                           (372)                                                    (20) 
Amortization of unearned compensation                            259                           -             -             -  
                                                           ---------                   ---------     ---------     ---------  
Ending Balance, June 30, 1998                              $ 248,373                   $  65,295     $  (8,326)    $  29,751  
                                                           =========                   =========     =========     =========  

FOR THE SIX MONTHS ENDED JUNE 30, 1997:

Beginning Balance, January 1, 1997                         $ 225,951                   $  46,742     $    (510)    $  29,614  
Comprehensive Income:
  Net income                                                  13,760      $  13,760        13,760
                                                                          ---------
  Other comprehensive income (loss):
    Unrealized gain on securities arising during period       16,028        16,028
    Less:  Tax on unrealized gain on securities               (6,732)       (6,732)
                                                           ---------     ---------
      Net:  Unrealized gain on securities                      9,296         9,296
    Foreign currency translation adjustments                  (3,951)       (3,951)
                                                                         ---------
    Other Comprehensive loss                                                 5,345                       5,345
                                                                         ---------
    Comprehensive Income                                                 $  19,105
                                                                         =========
Exercise of stock options                                        706                                                      49  
Treasury stock reissued                                          898           
Restricted stock, net
Amortization of unearned compensation                            408                                                          
Common stock issued in acquisitions                            6,515                           -             -             -  
                                                           ---------                   ---------     ---------     ---------  
Ending Balance, June 30, 1997                              $ 253,583                   $  60,502     $   4,835     $  29,663  
                                                           =========                   =========     =========     =========  

<CAPTION>
                                                           
                                                           
                                                              Unearned       Treasury      Paid-In
                                                            Compensation      Stock        Capital
                                                           ----------------------------------------
<S>                                                           <C>           <C>           <C>      
FOR THE SIX MONTHS ENDED JUNE 30, 1998:

Beginning Balance, January 1, 1998                            $  (2,768)    $ (16,992)    $ 180,538
Comprehensive Income (loss):
  Net loss                                                 
                                                           
  Other comprehensive loss:
    Unrealized gain on securities recorded to income       
    Less:  Tax on unrealized loss on securities            
                                                           
      Net:  Unrealized loss on securities                  
    Foreign currency translation adjustments               
                                                           
    Other comprehensive loss                               
                                                           
    Comprehensive loss                                     
                                                           
Exercise of stock options                                                                        99
Treasury stock reissued                                                           461           408
Restricted stock, net                                               147          (237)         (262)
Amortization of unearned compensation                               259             -             -
                                                              ---------     ---------     ---------
Ending Balance, June 30, 1998                                 $  (2,362)    $ (16,768)    $ 180,783
                                                              =========     =========     =========

FOR THE SIX MONTHS ENDED JUNE 30, 1997:

Beginning Balance, January 1, 1997                            $  (2,908)    $ (17,932)    $ 170,945
Comprehensive Income:
  Net income                                               
                                                           
  Other comprehensive income (loss):
    Unrealized gain on securities arising during period    
    Less:  Tax on unrealized gain on securities            
                                                           
      Net:  Unrealized gain on securities                  
    Foreign currency translation adjustments               
                                                           
    Other Comprehensive loss                               
                                                           
    Comprehensive Income                                   
                                                           
Exercise of stock options                                                        (250)          907
Treasury stock reissued                                                           392           506                          
Restricted stock, net
Amortization of unearned compensation                               408
Common stock issued in acquisitions                                   -           798         5,717
                                                              ---------     ---------     ---------
Ending Balance, June 30, 1997                                 $  (2,500)    $ (16,992)    $ 178,075
                                                              =========     =========     =========
</TABLE>


See accompanying notes to the Consolidated Condensed Financial Statements.

                                        6


<PAGE>   7


                               ALLEN TELECOM INC,
                               ------------------
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)

1.       General:
         -------

         In the opinion of the management of Allen Telecom Inc. (the "Company"),
         the accompanying unaudited consolidated condensed interim financial
         statements reflect all adjustments necessary to present fairly the
         financial position of the Company as of June 30, 1998 and the
         consolidated results of its operations, cash flows and changes in
         stockholders' equity for the periods ended June 30, 1998 and 1997. The
         results of operations for such interim periods are not necessarily
         indicative of the results for the full year. The year-end 1997
         consolidated condensed balance sheet was derived from audited financial
         statements, but does not include all disclosures required by generally
         accepted accounting principles. For further information, refer to the
         consolidated financial statements and footnotes thereto included in the
         Company's Annual Report on Form 10-K for the year ended December 31,
         1997. Certain reclassifications have been made to the 1997 financial
         statements to conform to the 1998 method of presentation.

2.       Other Income (loss):
         -------------------

         The components of "Other Income (loss), net" pertain to various
         telecommunication investments and are as follows (amounts in
         thousands):

<TABLE>
<CAPTION>
                                                  Three Months Ended      Six Months Ended
                                                       June 30,             June 30,
                                                 -------------------    ------------------
                                                   1998        1997       1998       1997
                                                 -------     -------    -------    -------

          <S>                                    <C>         <C>        <C>        <C>    
          RF Micro Devices Inc.                  $(3,505)    $   500    $ 8,033    $   500
          NextWave Telecom Inc.                        -           -     (6,640)         -
          Windata Inc.                                 -           -     (3,734)         -
          Columbia Spectrum    
            Management, L.P.                           -         200          -      1,725
                                                 -------     -------    -------    -------
                                                 $(3,505)    $   700    $(2,341)   $ 2,225
                                                 =======     =======    =======    =======
</TABLE>

         The Company owns stock of RF Micro Devices Inc. ("RFMD"), which
         completed an initial public offering of its common stock on June 3,
         1997. The composition of the Company's holdings at December 31, 1997
         (included in "Other assets") and at June 30, 1998 (included in "Other
         current assets") are as follows (amounts in thousands):

<TABLE>
<CAPTION>
         -----------------------------------------------------------------------------
                                                               Unrealized      Market
                                    Shares        Cost           Gains          Value

         -----------------------------------------------------------------------------
<S>      <C>                        <C>          <C>            <C>            <C>    
         December 31, 1997          1,021        $ 2,778        $ 9,890        $12,668

         June 30, 1998                965        $ 3,003        $ 7,497        $10,500
         -----------------------------------------------------------------------------
</TABLE>



                                        7


<PAGE>   8


                               ALLEN TELECOM INC,
                               ------------------
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)
                                   (Continued)

         The Company's investment in RFMD was subject to certain trading
         restrictions, which were substantially eliminated in the first quarter
         of 1998, at which time the Company decided to sell its holdings. As a
         result, the Company transferred unrealized appreciation, previously
         recorded in stockholders' equity, in the pretax amount of $11,590,000
         to "Other income (loss), net" in the first quarter. During the second
         quarter of 1998, the Company realized a before-tax gain of $860,000
         after selling 56,000 shares, using specific identification to allocate
         the cost basis. "Other income (loss), net", in the second quarter of
         1998 includes a loss ($.05 per basic and diluted share after related
         income taxes) related to adjusting such investment to market value at
         June 30, 1998. Approximately 900,000 shares were sold in July 1998 at a
         pre-tax gain of approximately $5,000,000 (selling price in excess of
         carrying value at June 30, 1998), which will be recognized in the third
         quarter of 1998. Future changes in unrealized holding gains related to
         the remaining 65,000 shares will be reflected in current earnings until
         the date of sale.

         The Company has an investment in and a receivable from NextWave Telecom
         Inc. ("NextWave"), which was previously awarded telecommunications
         licenses under a competitive auction bid process. In 1998, the Federal
         Communication Commission issued guidelines with respect to alternatives
         for certain C Block licensees in regard to the payment or return of
         licenses previously awarded. These guidelines were less favorable than
         had been requested by certain licensees. In the first quarter of 1998,
         the Company recognized impairment in the entire value of its investment
         in and receivable from NextWave as a result of that action. On June 8,
         1998, NextWave filed for relief under Chapter 11 of the United States
         bankruptcy code. Additionally, in the first quarter of 1998, the
         Company fully reserved its investment in Windata Inc. as a result of
         that company's decision to liquidate and sell its assets and product
         lines.

         The net impact on earnings per share for such Other Income (loss) for
         the three and six months ended June 30, 1998 was $.08 and $.06 per
         basic and diluted share, respectively, after related tax effects.

3.       Impact of New Accounting Pronouncements:
         ----------------------------------------

         The Financial Accounting Standards Board issued Statement of Financial
         Accounting Standards No. 133, "Accounting for Derivative Instruments
         and Hedging Activities", in June 1998. This statement is effective for
         financial statements issued for all fiscal quarters of fiscal years
         beginning after June 15, 1999. Accordingly, the Company will adopt the
         provisions of the standard on January 1, 2000. The Company utilizes
         hedging activities primarily in its foreign subsidiaries to limit
         exchange rate risk. The Company has not yet determined the effect, if
         any, of the adoption of this Statement on results of operations,
         financial position or liquidity.


                                        8


<PAGE>   9


                               ALLEN TELECOM INC,
                               ------------------
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)
                                   (Continued)

         In March 1998, the Accounting Standards Executive Committee of the
         American Institute of Certified Public Accountants issued Statement of
         Position 98-1, "Accounting for the Costs of Computer Software Developed
         or Obtained for Internal Use". This statement provides guidance on the
         accounting treatment for certain costs incurred in developing or
         purchasing software for the internal use of the Company. The Company
         will adopt the standard on January 1, 1999, requiring the Company to
         expense certain costs incurred on a prospective basis. The Company has
         determined that once adopted, the statement will not have a material
         impact on results of operations.

4.       Operations
         ----------

         In the second quarter of 1998, the Company announced the consolidation
         and rationalization of certain product lines. In this connection, the
         Company has recorded a $15,800,000 before-tax special charge to
         earnings (or $.38 per basic and diluted share after related income
         taxes) related to inventory, other asset write-offs and employee
         terminations. Of this amount, $12,200,000 is recorded in cost of sales,
         and $3,600,000 in selling, general and administrative expenses.

5.       Discontinued Operations Litigation:
         -----------------------------------

         In early 1998, the Company's Marta Technologies Inc. ("Marta")
         subsidiary, which operates its discontinued vehicle emissions testing
         business, reopened the Cincinnati, Ohio program for testing. In
         connection with the initial suspension of that contract by the Ohio
         Environmental Protection Agency ("Ohio EPA"), Marta was granted a
         preliminary injunction on September 23, 1996 and a permanent injunction
         on November 19, 1997 against Ohio EPA and its Director, enjoining them
         from (i) conducting a hearing regarding termination of the contract,
         (ii) terminating the Ohio contract, or (iii) prohibiting Marta from
         performing its obligations under the Ohio contract. On December 31,
         1997, Marta filed a lawsuit against Ohio EPA and its Director in an
         amount not less than $40 million claiming damages for Ohio EPA's
         unilateral and illegal suspension of the program and numerous other
         actions which will, in the future, increase costs to operate the
         program and/or reduce the amount of revenues the State was
         contractually obligated to provide. Subsequent thereto, the State
         counterclaimed, denied Marta's allegations and demanded $10 million in
         liquidated damages, contract damages and/or civil penalties as a result
         of Marta's alleged failure to meet the terms of the contract. In the
         opinion of management, based on the advice of counsel, it cannot
         predict the outcome of these lawsuits and the Company has not recorded
         any asset or liability with respect thereto.



                                        9


<PAGE>   10



           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           ----------------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS
                       -----------------------------------
                               ALLEN TELECOM INC.
                               ------------------


RESULTS OF OPERATIONS
---------------------

Summary:
--------

Allen Telecom Inc. (the "Company") reported a net loss of $11.1 million ($.41
per common share) for the three months ended June 30, 1998, as compared with net
income of $6.7 million ($.25 per common share) for the three months ended June
30, 1997. For the six months ended June 30, 1998, the Company reported a net
loss of $4.8 million ($.18 per share), compared to net income of $13.8 million
($.51 per share) in 1997.

Included in results of operations for the second quarter of 1998 are special
charges related to the consolidation and rationalization of certain product
lines. These actions include, among others, the discontinuance of product
development and marketing efforts on the SmartCell wireless local loop product,
which did not achieve adequate market acceptance, the consolidation of two
manufacturing operations of the Systems product line, the formation of a
worldwide systems business, and the reorganization of the Company's North
American-based sales force. As a result of asset write-offs, severance and other
costs associated with such actions, the Company incurred a special charge in the
amount of $15.8 million before-tax, or $.38 per share after related income
taxes. (See also Note 4 of Notes To Consolidated Condensed Financial
Statements.)

Sales:
------

Sales for the second quarter 1998 of $98.0 million decreased approximately 10.0%
from the comparable 1997 period, while sales for the six-month period ended June
30, 1998 of $211.4 million were essentially equal to 1997 sales. The decrease in
sales in the second quarter of 1998 is due principally to lower sales of
international site and domestic systems products. Sales of foreign operations
were negatively impacted by the weakening U.S. dollar relative to certain
European currencies since 1997. As a result, reported sales in the first half of
1998 were $8.0 million lower as compared with the first half of 1997, assuming
the exchange rates stayed the same.

The Company continues to see weakness in certain Asian economies, which have
been and are expected to continue to be important markets for wireless equipment
products. In addition, the U.S. wireless telecommunications market continues to
be soft, particularly with respect to the developing PCS markets. Other
international markets remain strong for the Company's equipment business,
although the Company has been advised by certain European original equipment
manufacturers ("OEM's") that their large inventory buildup will continue to
negatively impact near term orders.



                                       10


<PAGE>   11



           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           ----------------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS
                       -----------------------------------
                               ALLEN TELECOM INC.
                               ------------------
                                   (Continued)


Operations:
-----------

Gross profit margins were 30.5% in the second quarter of 1998, prior to the
aforementioned special charges, as compared with 35.1% in the second quarter of
1997. For the six-month period ended June 30, 1998 and 1997, profit margins were
31.0%, prior to special charges, and 35.4%, respectively. The lower gross profit
margins in 1998 were due to lower sales levels, increased pricing pressure and a
greater sales mix of lower margin products.

Selling, general and administrative expenses were 17.3% (excluding special
charges) and 15.4% for the second quarters of 1998 and 1997, and 15.7% and 15.6%
for the six-month periods ended June 30, 1998 and 1997, respectively. The
increase in this ratio for the second quarter reflects the spreading of fixed
costs on lower sales, while the ratio is essentially the same for the six-month
period versus the prior year due to flat sales. Selling, general and
administrative expenses for the quarter and year-to-date period were impacted by
lower staffing and operating expenses as a result of actions instituted in late
1997 to lower costs. Offsetting this decline, in part, is higher amortization of
goodwill ($3.1 million compared with $1.4 million in the 1998 and 1997 six-month
periods, respectively) due primarily to the acquisition of the outstanding 20%
ownership interest in the Company's FOREM S.r.l subsidiary ("Forem") in 1997.

Research and development and new product engineering costs were 8.4% and 7.0% of
sales in the second quarter of 1998 and 1997, and 7.5% and 6.8% for the
six-month periods ended June 30, 1998 and 1997, respectively. The increase in
this ratio for the second quarter reflects the spreading of higher costs on
lower sales. The increase in costs for the 1998 three and six-month periods over
the comparable 1997 periods is due to increased spending for the development of
the Company's geolocation product (ability to locate subscribers who dial 911
from a wireless telephone) and other R&D projects.

Other Income (Loss):
--------------------

See Note 2 of Notes to Consolidated Condensed Financial Statements for
information concerning other income (loss) items.








                                       11


<PAGE>   12



           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           ----------------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS
                       -----------------------------------
                               ALLEN TELECOM INC.
                               ------------------
                                   (Continued)


Interest and Financing Expenses:
--------------------------------

Net interest and financing costs increased to $1.8 million and $3.0 million in
the three and six months ended June 30, 1998, respectively, from $.7 million and
$1.3 million for the comparable 1997 periods. The principal reason for the
increase is higher outstanding borrowings incurred for investments in
telecommunication companies and lower cash flow from operations.

Provision for Income Taxes:
---------------------------

The Company's effective tax rate was 36% and 37% for the quarters ended June 30,
1998 and 1997, respectively, while such rates were 25% and 40%, respectively,
for the six-month periods then ended. The reduction in effective tax rate for
the six months ended June 30, 1998 reflects lower proportional foreign income
taxed at higher rates and a higher proportion of available tax credits on lower
income. The second quarter tax rate of 36% is in line with the Company's current
expectation of a 38% effective tax rate for the full year.

Minority Interests:
-------------------

Minority interest expense decreased from $1.8 million and $3.3 million in the
second quarter and six months ended June 30, 1997, respectively, to $.5 million
and $1.2 million for the comparable 1998 periods. This decrease is primarily due
to the exclusion of the 20% minority interest in Forem which was purchased in
late 1997.

Discontinued Operations:
------------------------

The Company is continuing the process of attempting to sell its centralized
automotive emissions testing business. In early 1998, Marta Technologies, Inc.
("Marta"), the subsidiary which operates this business, re-started the
Cincinnati, Ohio program which had been shut down since August 1996. Marta
instituted litigation (as described in Note 5 of Notes To Consolidated Condensed
Financial Statements) against the State of Ohio for damages with respect to both
the shut down of the program and other actions which would increase costs or
reduce revenues. Based on the Cincinnati program's operations to date, the
inability to resolve operational and legal issues with respect to this program
could negatively impact the carrying value and ultimate recovery value of this
program upon sale or other disposition.





                                       12

<PAGE>   13



           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           ----------------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS
                       -----------------------------------
                               ALLEN TELECOM INC.
                               ------------------
                                   (Continued)


LIQUIDITY AND CAPITAL RESOURCES:
--------------------------------

As set forth in the Consolidated Condensed Statement of Cash Flows, the Company
used $2.1 million in cash from operations for the six months ended June 30, 1998
as compared with cash generation of $13.2 million for the comparable 1997
period. The decline in cash flow from operations is principally due to lower net
income in 1998, combined with higher income tax payments by the Company's
foreign subsidiaries in the first half of 1998 offset, in part, by a lower
investment in working capital. Further, the Company expended $28.3 million for
investments in telecommunications companies, relating primarily to the final
purchase price for the outstanding minority interest in Forem. This payment was
financed through long-term borrowings. This payment is the principal reason for
the decline in Accounts payable and the corresponding increase in Long-term debt
in the Consolidated Condensed Balance Sheet at June 30, 1998. At June 30, 1998,
the Company had available unused lines of credit in the amount of $47 million.

--------------------------------------------------------------------------------

Statements included in this Form 10-Q which are not historical in nature are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
regarding the Company's future performance and financial results are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Allen
Telecom's Annual Report on Form 10-K contains certain detailed factors that
could cause the Company's actual results to materially differ from
forward-looking statements made by the Company, including, among others, the
costs and timetable for new product development, the health and economic
stability of the world and national markets, the uncertain level of purchases by
current and prospective customers of the Company's products and services, the
impact of competitive products and pricing, the potential impact of the
Company's attempts to sell it discontinued operations in the vehicle emissions
testing business, and the ultimate market value of the Company's investments in
telecom ventures.











                                       13

<PAGE>   14



                           PART II - OTHER INFORMATION
                           ---------------------------


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
--------------------------------------------------------------------

         Not applicable.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

At the Annual Meeting of Stockholders of the Company held on May 1, 1998 three
proposals were voted upon by the Company's stockholders. A brief description of
each proposal voted upon at the Annual Meeting and the number of votes cast for,
against and withheld are set forth below.

A vote by ballot was taken at the Annual Meeting for the election of 9 Directors
of the Company to hold office until the next Annual Meeting of Stockholders of
the company and until their respective successors shall have been duly elected
and qualified. The aggregate numbers of shares of Common Stock (a) voted in
person or by proxy for each nominee, or (b) with respect to which proxies were
withheld for each nominee, were as follows:

<TABLE>
<CAPTION>
                    Nominee                                        For                                 Withheld
                    -------                                        ---                                 --------

<S>                                                            <C>                                      <C>    
Phillip Wm. Colburn                                            24,302,130                               466,111
                                                               ----------                               -------
Jill K. Conway                                                 24,302,385                               465,856
                                                               ----------                               -------
Albert H. Gordon                                               24,149,683                               618,558
                                                               ----------                               -------
William O. Hunt                                                24,309,343                               458,898
                                                               ----------                               -------
J. Chisholm Lyons                                              24,241,150                               527,091
                                                               ----------                               -------
John F. McNiff                                                 24,307,743                               460,498
                                                               ----------                               -------
Robert G. Paul                                                 24,317,052                               451,189
                                                               ----------                               -------
Charles W. Robinson                                            24,157,767                               610,474
                                                               ----------                               -------
William M. Weaver, Jr.                                         24,153,535                               614,706
                                                               ----------                               -------
</TABLE>

A vote by ballot was taken at the meeting on the proposal to approve the
adoption of the amendment to increase the number of shares available under the
Company's 1992 Stock Plan, as amended. The aggregate numbers of shares of Common
Stock in person or by proxy which: (a) voted for, (b) voted against or (c)
abstained from the vote on such proposal were as follows:

<TABLE>
<CAPTION>
                 For                                   Against                                Abstain
                 ---                                   -------                                -------
<S>           <C>                                     <C>                                     <C>   
              20,374,074                              4,350,389                               43,778
</TABLE>





                                       14

<PAGE>   15



                           PART II - OTHER INFORMATION
                           ---------------------------
                                   (Continued)


A vote by ballot was taken at the Annual Meeting on the proposal to ratify the
appointment of Coopers & Lybrand L.L.P. (now known as PricewaterhouseCoopers
LLP) as auditors for the Company for the fiscal year ending December 31, 1998.
The aggregate numbers of shares of Common Stock in person or by proxy which: (a)
voted for, (b) voted against or (c) abstained from the vote on such proposal
were as follows:

<TABLE>
<CAPTION>
                 For                                   Against                                Abstain
                 ---                                   -------                                -------
<S>           <C>                                      <C>                                    <C>   
              24,698,289                               34,075                                 35,877
</TABLE>

The foregoing proposals are described more fully in the Company's definitive
proxy statement dated March 19, 1998, filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Act of 1934, as amended,
and the rules and regulations promulgated thereunder.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
------------------------------------------


(a)  Exhibits
     --------

     (11)     Statement re computation of per share earnings.

     (27)     Financial Data Schedule.

(b)  Reports on Form 8-K
     -------------------

              None.




                                       15

<PAGE>   16



                                   SIGNATURES
                                   ----------






Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                      Allen Telecom Inc.
                                                       (Registrant)




Date:  August 13, 1998               By:        /s/ Robert A. Youdelman
       ---------------                    --------------------------------------
                                                    Robert A. Youdelman
                                                  Executive Vice President
                                                 (Chief Financial Officer)




Date:  August 13, 1998               By:        /s/ James L. LePorte, III
       ---------------                    --------------------------------------
                                                  James L. LePorte, III
                                                Vice President, Treasurer
                                                    and Controller
                                              (Principal Accounting Officer)



                                       16


<PAGE>   17



                                  EXHIBIT INDEX
                                  -------------
                               ALLEN TELECOM INC.
                               ------------------


Exhibit Number
--------------

     (11)           Statement re computation of per share earnings.

     (27)           Financial Data Schedule.































                                       17