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                                                                      Exhibit 11
                             BLUE WAVE SYSTEMS INC.

                     COMPUTATION OF PER SHARE INCOME (LOSS)

                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                1998          1997         1996
                                                                             ----------    ----------    ----------
                                                                                           (restated)    (restated)
<S>                                                                          <C>           <C>           <C>       
BASIC INCOME PER SHARE:
     Net income (loss) applicable to common stock                            $  (11,454)   $   (1,830)   $    3,623
                                                                             ==========    ==========    ==========

     Weighted average shares outstanding                                         12,684        10,594        10,457

Basic income (loss) per share                                                $    (0.90)   $    (0.17)   $     0.35
                                                                             ==========    ==========    ==========


DILUTED INCOME PER SHARE:
     Total weighted average shares from above                                    12,684        10,594        10,457

     Weighted average of options outstanding                                        N/A           N/A         1,628
     Weighted average exercised options outstanding for portion of period,
          net of equivalent shares purchased at average fair market value           N/A           N/A            97
     Effect of using option proceeds to repurchase common stock at average
          fair market value                                                         N/A           N/A          (181)
     Effect of conversion of subordinated debentures                                N/A           N/A           217
                                                                             ----------    ----------    ----------

                                 Other dilutive securities                       12,684        10,594        12,218
                                                                             ----------    ----------    ----------

Net income (loss)                                                               (11,454)       (1,830)        3,623
Adjustment to net income for interest on subordinated debentures                     --            --            46
                                                                             ----------    ----------    ----------
Net income (loss), as adjusted                                               $  (11,454)   $   (1,830)   $    3,669
                                                                             ==========    ==========    ==========

Diluted income (loss) per share                                              $    (0.90)   $    (0.17)   $     0.30
                                                                             ==========    ==========    ==========
</TABLE>