SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.  20549

                                    FORM 10-K

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

                   For the Fiscal Year Ended September 30, 1998

                                        or

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

                        For the Transition Period from to

                          Commission File Number 0-23212

                               Telular Corporation
              (Exact name of Registrant as specified in its charter)

             Delaware                                    36-3885440
  (State or other jurisdiction of                     (I.R.S.  employer
  incorporation or organization)                     identification no.)

             647 North Lakeview Parkway, Vernon Hills, Illinois 60061
              (Address of principal executive offices and zip code)

                                  (847) 247-9400
               (Registrant's telephone number, including area code)

  Securities registered pursuant to 12(b) of the Act:    None

  Securities registered pursuant to Section 12(g) of the Act: Common Stock,
  $.01 Par Value

       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 (or for such  shorter
  period that  the  registrant was  required  to file  such  reports),  and
  (2) has been subject to  such filing requirements for  the past 90  days.
  Yes [X]  No [   ]

       Indicate by check mark if  disclosure of delinquent filers  pursuant
  to Item 405 of  Regulation S-K (Section 229.405 of  this chapter) is  not
  contained herein, and will not be contained, to the best of  registrant's
  knowledge, in definitive proxy or information statements incorporated  by
  reference in  Part III  of  this  form 10-K  or  any  amendment  to  this
  Form 10-K. [    ]

       As of November  20, 1998, the aggregate  market value of the  voting
  stock  held  by  non-affiliates  of  the  Registrant  was   approximately
  $13,796,490* (based  upon  the  closing sales  price  of  such  stock  as
  reported by the Nasdaq National Market on such date).

       The number of  shares outstanding of  the Registrant's Common  Stock
  as of  November 20,  1998, the  latest practicable  date, was  34,710,636
  shares.
<PAGE>
                     DOCUMENTS INCORPORATED BY REFERENCE

       Certain  portions of  the  Proxy  Statement to  be  filed  with  the
  Securities and Exchange Commission within 120 days after the close of the
  Registrant's fiscal  year ended  September 30, 1998  are incorporated  by
  reference in Part III of this Form 10-K.


     * Excludes  the  Common  Stock  held  by  Named  Executive   Officers,
       directors and stockholders whose ownership exceeds 5% of the  Common
       Stock outstanding at  November 20, 1998.   Exclusion of such  shares
       should not be construed to  indicate that any such person  possesses
       the power, direct or indirect,  to direct or cause the direction  of
       management or  policies of  the Registrant  or that  such person  is
       controlled by or under common control with the registrant.
<PAGE>


                                   PART I

  Item 1.  Business

  Background

  Overview

       Telular Corporation (the Company) is in the fixed wireless
  telecommunications industry.  The Company designs, develops, manufactures
  and markets products based on its proprietary interface technologies,
  which provide the capability to bridge wireline telecommunications
  customer premises equipment (CPE) with cellular-type transceivers for use
  in wireless communication networks.  Applications of the Company's
  technology include fixed wireless telecommunications as a primary service
  where wireline systems are unavailable, unreliable or uneconomical, as
  well as wireless backup systems for wireline telephone systems and
  wireless alarm signaling (WAS).  The Company's principal product lines
  are: PHONECELL, a line of fixed wireless terminals (FWTs), and
  TELGUARD, a line of WAS products.

       In 1986, the Company acquired the intellectual property rights for
  its cellular interface concept and methodology.  The Company's patents
  cover not only circuitry, but also the very concept and principles
  underlying the use of an intelligent interface device in conjunction with
  cellular-type transceivers and systems.

       In 1994, the Company completed an initial public offering (IPO) of
  its Common Stock, which raised approximately $56.4 million.  The
  Company's stock is traded on the Nasdaq National Market System under the
  ticker symbol WRLS.   In 1995, the Company raised $18.0 million from the
  private placement of convertible debentures.  In 1997, the Company raised
  $18.8 million from private placements of Series A Convertible Preferred
  Stock.

  Acquisitions

       In 1993, the Company acquired two companies: Telular International,
  Inc. (Telular International), formerly Codecom Rural Communications,
  located in Puerto Rico, and Telular-Adcor Security Products, Inc. located
  in Atlanta, formerly known as Adcor Electronics International, Inc.  Both
  entities are wholly owned subsidiaries of the Company.

       Effective October 1, 1997, the Company acquired Wireless Domain
  Incorporated (WD).  Prior to October 1, 1997, the Company had acquired
  50% of WD in three separate transactions during 1997 and 1996.  This
  transaction added 29 engineers to the Company.
<PAGE>

  Wireless Telecommunications Overview

       The vast majority of the telephones in the world continue to be
  concentrated in a relatively small number of industrialized countries.
  While telecommunications infrastructure is a critical element of economic
  growth, most developing nations have telephone systems that are
  inadequate to sustain essential services.  Thus, developing countries are
  seeking basic communications solutions that are cost effective and can be
  deployed rapidly to support aggressive economic development programs.

       The process of improving and expanding telephone networks using
  advanced wireless technology in developed and developing countries has
  created a major market for wireless telecommunication equipment such as
  the Company's FWT.  In developed countries, mobile cellular systems have
  changed the way people communicate and have enjoyed phenomenal growth
  that is expected to continue in the future.  In developing countries,
  wireless local loop (WLL) systems represent what is very often the
  fastest and most cost-effective way of providing basic telephone service.
  WLL systems are conventional cellular networks constructed and operated
  primarily for fixed users.

       The wireless alternative access (WAA) market involves FWTs operating
  on mobile cellular networks built  primarily for handheld cellular  phone
  users.   For WAA applications, FWT sales generally begin developing after
  a new mobile  network has been  in operation for  a few  years, when  the
  growth rate  in  new cellular  phone  subscribers slows  and  the  mobile
  operator begins  looking  for  new revenue  sources.    FWTs  offer  this
  opportunity because they are less costly to support as they are linked to
  a single cell site, generate more  average airtime and operate mainly  at
  off-peak times.

  Company Strategy

       The Company's strategy is to leverage twelve years of experience in
  the market, internationally-accepted products and court-tested patents
  into a continuing leadership position in the rapidly developing WLL and
  WAA FWT equipment industry.  Global telecommunications equipment
  manufacturers together with national and international service providers
  are increasingly sharing the Company's vision that wireless systems in
  both developed and developing countries are well suited for use as basic
  telephone service networks.  The key trends that are fueling the
  worldwide adoption of WLL/WAA programs include the following:

          .  Rapid acceptance of cellular communications;
          .  An accelerating trend toward privatization of
             telecommunication service in both developed and developing
             countries;
          .  Development and adoption of digital wireless transmission
             standards that enhance network capacity and service
             capability while significantly reducing the effective cost
             per subscriber served;
          .  Service network providers acceptance of wireless network
             solutions as fast, cost effective answers to their customers'
             unfulfilled demand for telecommunications service; and
          .  PCS licensing within the U.S., which should intensify
             competition by wireless service providers to capture wireline
             minutes of usage and the potential for a large bypass market.

      Target Markets and Product Applications

       The Company's fiscal year 1998 revenues have been primarily
  international, derived from the sale of PHONECELL FWTs for integration
  into WLL/WAA systems being installed in developing countries.Significant
  revenues are derived domestically from the Company's TELGUARD WAS product
  line.

       The Company's major opportunities can be grouped into four
  categories:
  
       . Wireless Basic Telephone Service;
       . Licensing of the Company's Technology and Sales to OEM customers;
       . Remote Monitoring and Supervisory Control and Data Acquisition
         (SCADA);
       . Disaster Recovery and Emergency Back-up Services.

<PAGE>

       Wireless Basic Telephone Service

       Many countries are evaluating or have already deployed wireless
       basic telecommunications systems in conjunction with, or as an
       alternative to, the expansion of their basic wireline systems.  The
       most significant market opportunity for the Company's products is
       for wireless basic telephone service in developing areas worldwide.

       Licensing of the Company's Technology and Sales to OEM Customers

       In response to the international demand for the Company's
       proprietary interface technology, the Company has been promoting the
       use of its interface technology in other telecommunication
       companies' products.  This marketing strategy has resulted in
       licensing of the Companies technology and sales of component parts
       to OEMs.  The Company expects to continue developing licensing and
       OEM arrangements.

       Remote Monitoring and Security Alarm Monitoring

       The use of fixed wireless cellular systems for remote monitoring and
       SCADA applications has been the most prevalent application of the
       Companies technology in developed countries, especially in the U.S.

       A major sub-group within this segment is WAS.  Wireless Alarm
       Signaling was one of the first applications of the Company's
       technology and is a growing segment of the business.  Use of the
       Company's specialized products allows an alarm monitoring system to
       automatically switch to a cellular network in the event of a
       telephone line failure, allowing alarms to be transmitted.

       Disaster Recovery and Back-Up Services

       Hundreds of major telephone network outages occur annually in the
       U.S. and other countries around the world.  Today, with the
       widespread availability of cellular telephone networks, a readily
       available and cost-effective solution is possible with the Company's
       technology.

       The Company's products are installed in hospitals, financial
       institutions, airports, emergency response centers, public service
       centers and utility companies.  The wireless back-up approach allows
       businesses to take advantage of situations where wireless service
       may be a desirable option to wired phone service.  For example,
       wireless service may be used for overflow traffic relief when
       regular telephone lines become blocked due to usage or for least-
       cost routing for long distance where wireless may be less expensive
       than local exchange carrier rates.


  Technology and Products

  Core Technology

       The Company's core patented technology is an intelligent interface
  (the Invention) that permits standard wireline CPE to operate on wireless
  networks. The Company's products containing the Invention provide the
  capability to bridge wireline telecommunications CPE and wireless
  networks.  The Invention provides a standard dial tone, off-hook
  detection signal and other signals usually provided by the Local Exchange
  Carrier (LEC), through its tip and ring wired local loop connection,
  which automatically generates a send signal to the cellular transceiver
  once the user has finished entering the telephone number. The Company has
  incorporated this core technology into a variety of products and radio
  standards and continues to develop and exploit derivative products and
  technologies for customer-specific applications.
<PAGE>

  Interface Technology

       The Company's products contain printed circuit boards that
  incorporate the Invention.  The interface components that comprise the
  Invention are used in the Company's finished products and are also sold
  separately.  In certain cases, the Company licenses its interface
  technology or patent rights to other companies, for which, in most cases,
  royalty fees are received.  However, most of the Company's revenues have
  been generated through the sale of finished products.

  Transceivers

       The Company historically has contracted with several suppliers for
  the critical components of its products.  The major exception to this
  policy has been transceiver units, which have been principally supplied
  by Motorola.  The Company's interface technology is compatible with
  several other manufacturers' transceivers and the Company has been able
  to utilize transceivers from such manufacturers.  In addition, the
  Company designs and builds its own radios for selected FWTs - see
  Research and Development below.

  The Company's Product Lines

       Products for WLL and WAA markets are marketed under the PHONECELL
  brand name.  WAS products are marketed under the TELGUARD brand name.
  Future product offerings will reflect a continued evolution of existing
  product lines.

       During fiscal year 1998, the Company improved its FWT market
       position on the following major radio standards:

         AMPS (Advanced Mobile Phone System) - While the overall FWT
         market is shifting from analog cellular to digital cellular,
         there remains many opportunities for this mature analog cellular
         standard.  When new digital mobile networks are installed in
         urban areas, the older analog infrastructure often is displaced
         and then redeployed for WLL use in the surrounding suburban area.
         The Company is the original supplier of analog FWTs and one of
         the few remaining analog suppliers, enabling it to capture a
         sizeable share of all new analog FWT business worldwide.  During
         fiscal year 1998, the Company introduced two new cost reduced
         AMPS FWTs.  These units have begun displacing lower featured and
         higher cost competitive units in several markets.  In November
         1998 the Company announced that it will supply a significant
         number of its AMPS fixed wireless terminals to the Rural
         Telephony Division of Telcel in Mexico during fiscal year 1999.

         GSM (Group System Mobile) - Despite the historical importance of
         analog, most planned FWT deployment in both WLL and WAA markets
         will be on one of the various digital standards.  Digital is more
         desirable than analog because it provides superior capacity,
         voice privacy, higher transmission rates for fax and data, and
         additional user services such as caller identification and
         messaging.  Last year, the Company introduced its first GSM FWT.
         Sales of this unit accounted for 35% of the Company's FWT
         business during fiscal year 1998.  The Company will introduce its
         second generation GSM FWT (the SX4 GSM FWT) in the second quarter
         of fiscal year 1999.  As the SX4 GSM FWT costs 30% less and has
         additional features, the Company expects to capture significantly
         more share of the GSM market with the SX4 GSM FWT.

         TDMA (Time Division Multiple Access) - Last year, the Company
         also introduced a new TDMA FWT which is a lower cost and higher
         quality product than its predecessor.  Due to its smaller size,
         this unit is well suited for payphone and Least Cost Routing
         (LCR) applications.  The Company has observed a rapid expansion
         of payphone opportunities recently.  This product operates on the
         newer TDMA networks that are being constructed under the TDMA IS-
         136 standard.  Most of the older TDMA networks are being upgraded
         to the new TDMA standard as well.  TDMA networks are widely
         deployed in Africa, Central America and South America.
<PAGE>

  Sales, Marketing and Service

  International Sales (Other than Canada)

       The international marketplace is characterized by new and repeat
  sales to established mobile cellular networks and to the emerging WLL
  programs throughout the world.  The Company has built international sales
  and marketing teams made up of professionals with experience in the
  Middle-East, Latin America, Asia, Europe, and Africa.  It has regional
  sales offices in Chicago, Illinois; Atlanta, Georgia; Miami, Florida;
  Oxford, England; Singapore; Hong Kong, Republic of China; Cape Town,
  South Africa; Budapest, Hungary; Sao Paulo, Brazil and Riga, Latvia.  The
  ability to provide on-site customer technical assistance and support has
  been identified as a key selling requirement, and the larger regional
  offices aid in providing this important service.

  U.S. Sales

       The Company markets certain products in the U.S. directly via an OEM
  sales group in Chicago, Illinois.  With the deployment of PCS networks in
  the U.S., the Company is focusing on establishing product development and
  supply relationships with network operators and PCS
  transceiver/infrastructure manufacturers and large telecommunication
  companies.

       The Company's TELGUARD line of products is marketed almost
  exclusively in the U.S.

  Sales to Canada

       In 1992, Telular Canada, Inc. (Telular Canada), an independent
  Toronto-based distributor of telecommunications products, purchased the
  Company's Canadian patents and the right to acquire the Company's
  technologies solely for use and sale within Canada.

  Service and Support

       The Company believes that providing customers with comprehensive
  product service and support is critical to maintaining a competitive
  position in the wireless telecommunications equipment industry. The
  Company offers warranty and repair service for its products through three
  primary methods: (1) advance replacement kits shipped as warranty with
  orders, (2) in-house service and technical sales support technicians and
  engineers at its Vernon Hills, Illinois and Hauppauge, New York
  facilities, as well as at certain regional sales offices and (3)
  authorized third party service centers in various regions of the world.

  Motorola Relationship

       In 1990, the Company entered into a cross-license agreement with
  Motorola Inc. (Motorola) under which the Company licensed to Motorola
  certain rights to manufacture, sell or use its Invention.  The cross-
  license agreement allows the Company to use Motorola's transceivers in
  the Company's products.

       In 1993, the Company entered into an agreement with Motorola,
  whereby Motorola, through its Cellular Subscriber Sector (CSS), acquired
  an interest in the Company of approximately 19% and, pursuant to an
  option, subsequently increased its holdings to 20%.  Motorola, after
  dilution due to the issuance of additional shares of Common Stock by the
  Company, now owns approximately 13.7% of the outstanding shares of the
  Company.  Motorola obtained the right to representation on the Company's
  Board of Directors and presently has one director.  This agreement
  provided the Company with access to certain of Motorola's engineering,
  technical service and other resources on a fee basis, subject to
  availability.  In addition, Motorola makes its AMPS, Extended Total
  Access Communication System (ETACS), Narrow-band Advanced Mobile Phone
  System (NAMPS), TDMA, GSM, CDMA, Iridium and other transceivers available
  for purchase by the Company for use in its products when, if, and as
  available.
<PAGE>

       In 1995, the Company expanded its relationship with Motorola.  The
  Company was awarded a contract to supply a customized version of its
  ETACS PHONECELL product to Motorola's Cellular Infrastructure Group (CIG)
  for deployment in existing and future WLL projects in Hungary.   In
  addition, CIG agreed to purchase $100 million of the Company's FWTs and
  provide funding for engineering and product development activities over a
  three-year period, commencing January 1, 1996.  During 1996 and 1997, the
  Company shipped $6 million and $21 million, respectively, of product
  under this agreement.  No product was under this agreement during fiscal
  year 1998.  Because of unfulfilled commitments of approximately $73
  million, the Company is currently negotiating with Motorola for
  resolution of this contract, which expires on December 31, 1998.


  Research and Development

       The Company believes that its future success depends on its ability
  to adapt to the rapidly changing telecommunications environment and to
  continue to meet customers' needs. The Company is currently adapting its
  products to new wireless technologies and is working closely with several
  companies, including long-distance carriers, cellular service providers,
  telecommunications infrastructure providers and equipment manufacturers,
  to develop new products.

       The Company's research and development staff is comprised of
  approximately 50 engineers segregated into four teams. Each team is
  responsible for a specific cellular standard, such as: AMPS, Code
  Division Multiple Access (CDMA), GSM or TDMA.  Additionally, the research
  area continually investigates methods by which the Company can reduce the
  cost of its products.

       The Company introduced several new PHONECELLs during fiscal year
  1998.  These included: two new analog AMPS FWTs, the SX3(i) AMPS and the
  SX3(e) AMPS; a new digital TDMA FWT, the SX2(e) TDMA; and a new digital
  CDMA FWT, the SX2(e) CDMA.  All of these products cost less to make and
  have more features than predecessor versions.  The SX3 AMPS units include
  a transceiver that was designed by the Company.

       The Company expects to introduce additional PHONECELLs during fiscal
  year 1999.  The most significant new FWT is the SX4 GSM FWT.  The SX4 GSM
  unit includes a transceiver that was designed by the Company, as well as
  the Company's Application Specific Integrated Circuit (ASIC).  The ASIC
  chip replaces some 75 electronic components and a circuit board, which
  significantly reduces the cost from the predecessor version.


  Manufacturing

       Fabrication of the Company's products is accomplished through a
  combination of in-house manufacturing and subcontracting. The assembly of
  printed circuit board interfaces for both FWT and WAS products is
  performed at the Company's facility in Vernon Hills, Illinois. The
  Company has developed proprietary testing equipment and procedures to
  conduct comprehensive quality control and quality assurance throughout
  the manufacturing and assembly process. Quality programs are a high
  priority at the Company.  The Vernon Hills facility became ISO 9001
  certified during fiscal year 1998.  The Company utilizes contract
  manufacturers to augment its manufacturing capability, thereby enabling
  it to more rapidly expand capacity when required to meet large orders.
  The Company's quality assurance department works closely with contract
  manufacturers to ensure compliance to the strict quality standards of the
  Company.
<PAGE>

  Employees

       As of November 20, 1998, the Company had 165 employees, of which 30%
  are in sales and marketing, 30% in engineering and product development,
  30% in manufacturing and 10% in finance and administration.  None of the
  Company's employees are represented by organized labor.


  Competition

       The industry consists of major domestic and international
  telecommunications equipment companies, many of which have substantially
  greater financial, technical, marketing, sales, manufacturing,
  distribution and other resources than those of the Company, and includes
  companies such as Motorola, Northern Telecom, Ericsson, Nokia and
  Qualcomm.  There are also international and domestic companies with fewer
  resources that make products that compete directly with the Company where
  the Company's patent protection is not available.  The Company competes
  with these companies primarily by selling products that provide features
  and qualities not otherwise available on the market, by developing new
  products incorporating its technology and by promoting new applications
  of its existing product line. The Company's interface and its related
  technology have been, and will continue to be, afforded substantial
  protection in those markets in which it holds patents.  In markets where
  the Company holds no patents, the Company competes directly with a range
  of competitors.  Approximately 60% of the Company's fiscal year 1998
  shipments were destined for foreign countries most of which afforded
  little or no patent protection.

       The wireless telecommunications industry is experiencing significant
  technological change, such as the transformation of cellular systems from
  analog to digital. The rate at which this change occurs and the success
  of such new technologies may have a material effect on the rate at which
  the Company expands its business and on its ability to achieve
  profitability.  The Company continues to invest in research and
  development in order to meet the technological advances in the industry
  and stay abreast of changes in cellular standards and end-user
  requirements.

       The Company has licensed its patent rights to Motorola, under an
  agreement in which Motorola is licensed to produce its own cellular
  interface. Motorola also sells fixed cellular products, and several other
  companies purchase Motorola's interface for inclusion in there own fixed
  cellular products. The Company receives a per unit royalty for any such
  products sold that are covered by the Company's patents. Motorola is a
  competitor with the Company in markets for analog AMPS and digital CDMA
  products both domestically and internationally.

       The Company has granted licenses under its patents to others for
  various uses and applications and continues to pursue such license
  arrangements.  It may face competition from those licensees, their
  sublicensees or their customers.

       It is  inevitable  in  growing  markets  with  huge  potential  that
  competition will  increase.   Accordingly, some  of the  large  companies
  noted above have introduced FWTs to the marketplace.

<PAGE>

  The Company believes its advantages over the competition are:

         Better focus/commitment  - In the WLL  market, the Company's  only
         business is  FWTs.  Most often,  competitors sell FWTs to  support
         their infrastructure business.

         More experience - The Company has been in the FWT business for  12
         years.

         Broader product  line - The  Company offers FWTs  that operate  on
         all major non-proprietary radio standards.


  Patents, Licenses and Other Intellectual Property

       The Company's success in the United States depends to an extent upon
  its ability to obtain  and enforce intellectual  property rights for  its
  technology  in  the  United  States.    With  respect  to  its  interface
  technology, the Company  currently has  seven United  States patents,  as
  well as 24 foreign patents and  two pending foreign patent  applications.
  The Company has successfully defended many of its patents in court.

  Principal Patent

       The patent  for  the Company's  system  for interfacing  a  standard
  telephone set with a  radio transceiver, U.S.  Patent No. 4,658,096  (the
  096 Patent), was issued by the U.S.  Patent Office on April 14, 1987  and
  expires on April 14, 2004.  The 096 Patent has been filed in 16 countries
  and to date has been issued in all but one of these countries.

       The invention covered by  the 096 Patent is  an interface between  a
  standard telephone and  a cellular transceiver.   The interface  provides
  dial tone,  off-hook detection  signals and  many  of the  other  signals
  usually provided  by regular  wireline telephones.   The  interface  also
  provides for the automatic generation of a send signal from the  cellular
  transceiver once the telephone number has been entered.

  Continuation Patents

       In 1988 and 1990, the Company obtained two patents (U.S. Patent Nos.
  4,775,997  and  4,922,517,  respectively),  the  first  of  which  is   a
  continuation and broadening of the 096 Patent and the second of which  is
  a continuation and further broadens the  096 Patent.  These  continuation
  patents expire on April 14, 2004.   Also in 1988, the Company obtained  a
  continuation-in-part of  the 096  Patent,  under U.S.  Patent  4,737,975.
  Among other things, this patent allows the interface to be programmed  to
  use three digit numbers, such as 911 or 411.

  Other Patents

       In 1992 and  1994, additional patents  were granted  to the  Company
  (U.S. Patent Nos. 5,134,651 and 5,361,297) for a method and apparatus for
  providing answer  supervision  and  an autonomous  pay  telephone.    The
  Company has been granted several additional patents for  self-diagnostics
  systems, payphones and answer  supervision both in  the U.S. and  abroad.
  In addition, the Company has three patent applications in the U.S and  16
  patent applications outside the U.S.

  Applicability of the Company's Patents to Emerging Wireless Technologies

       Although the  Company  believes  its intelligent  interface  can  be
  adapted to accommodate  emerging wireless technologies,  there can be  no
  assurance that these new applications will  fall within the scope of  the
  existing patent protection.
<PAGE>
  Licensing of Technology
<TABLE>
<CAPTION>

       The Company has  granted licenses to  a number  of other  companies,
  which include the following:
    <S>                       <C>
    Motorola                  (See Motorola Relationship);

    CKG Technologies          (non-exclusive, nontransferable license limited
                              to the manufacture of a portable cellular
                              workstation and/or a cellular modem);

    Harvest Electronics, Ltd. (non-exclusive license for manufacture and
                              sale of an interface for vending equipment);

    Millidyne, Inc.           (non-exclusive license for manufacture and
                              sale of subscriber data modems and mobile
                              data gateway equipment, incorporating certain
                              technology transferred by the Company);

    ADI                       (non-exclusive world-wide license for
                              manufacture and sale of  fixed wireless
                              terminals);

    Communications Mfg. Co.   (limited non-exclusive field of use license);

    Ora Electronics, Inc.     (limited non-exclusive field of use license);

    Ericsson Radio Systems AB (limited field of use patent license agreement);

    Nokia Mobile Phones, Ltd. (limited geographic license);
</TABLE>

  Trademarks and Other Proprietary Information

       The Company has 11 registered trademarks which are: TELULAR plus
  design, TELULAR, CELJACK, PCSone ,  TELCEL, Hexagon Logo, PHONECELL,
  CELSERV, TELGUARD, CPX, and AXCELL.  In addition, the Company has six
  registered Mexican trademarks covering the names and logos used for some
  of its products.  The Company has 85 other foreign trademark
  registrations and 15 other foreign trademark applications.


  Item 2.  Properties

       The Company leases, pursuant to a ten-year lease, its corporate
  headquarters in Vernon Hills, Illinois which occupies 72,000 square feet.
  In addition to serving as corporate headquarters, the facility houses
  manufacturing, sales and marketing, engineering, finance and
  administrative functions.  The Company also leases space for
  international sales offices in Miami, Florida, Oxford, England and
  Singapore.  The Company also leases space to house its domestic
  salesforce in Atlanta, Georgia.


  Item 3.  Legal Proceedings

       Not applicable.


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

       No matters were submitted to a vote of security holders during the
  fourth quarter of the fiscal year ended September 30, 1998.
<PAGE>

                                 PART II

  Item 5. Market for Registrant's Common Equity and Related Stockholder
          Matters

  Market Price of and Dividends on Common Stock

       The Company's Common Stock trades publicly on the Nasdaq National
  Market System under the symbol WRLS.  The following table sets forth the
  quarterly high and low sales prices for each quarter of fiscal year 1998,
  1997 and 1996, as reported by Nasdaq.  Such quotations reflect inter-
  dealer prices without retail markup, markdown or commissions and may not
  necessarily represent actual transactions.
<TABLE>
                      Quarter Ended during Fiscal 1998
                December 31  March 31  June 30  September 30
       <S>             <C>       <C>      <C>           <C>
       High            4.03      3.09     2.50          1.94
       Low             1.91      1.81     1.84          0.96

                       Quarter Ended during Fiscal 1997
                December 31  March 31  June 30  September 30
       <S>             <C>       <C>      <C>           <C>
       High            5.56      8.38     6.00          3.13
       Low             4.31      5.00     3.50          2.25

                       Quarter Ended during Fiscal 1996
                December 31  March 31  June 30  September 30
       <S>            <C>       <C>       <C>           <C>
       High           15.37     10.50     9.00          6.62
       Low             8.00      2.00     4.12          4.12
</TABLE>

       On November 20, 1998, there were approximately 376 shareholders of
  record, 7,804 beneficial shareholders and 34,710,636 shares of Common
  Stock outstanding.  The Company has not paid any dividends since its
  inception and does not intend to pay any dividends on its Common Stock in
  the foreseeable future.  Pursuant to the Company's Loan and Security
  Agreement with Sanwa Commercial Credit Corporation, the Company has
  agreed that, during the term of that agreement, the Company will not,
  without the consent of the lender, declare or pay any dividend or other
  distribution on any class of its stock.

       From October 2, 1998, until November 20, 1998 (the last practicable
  date), the price for the Company's Common Stock has closed in the range
  of $0.969 to $0.594 per share.  On November 12, 1998, the Company
  received notification from Nasdaq that the Company has a 90-day period to
  bring itself back into compliance with the Nasdaq's rules, which require,
  among other things, that listed companies maintain a minimum stock price
  per share of one-dollar.  On October 30, 1998,  the Company announced that
  its Board of Directors will seek shareholder approval at its annual
  shareholder meeting on January 26, 1999, to effect a Reverse Stock Split.
  By effectuating the Reverse Stock Split, the Company expects to raise its
  Share price above one-dollar and bring itself back into compliance with
  this listing requirement.

  Recent Sales of Unregistered Securities

  Compensation

       In 1996, the Company entered into an employment agreement with
  Kenneth E. Millard, pursuant to which Mr. Millard agreed to serve as
  Chief Executive Officer and President of the Company.  Under the
  Agreement, Mr. Millard is to eligible to receive an incentive bonus of
  $200,000, payable quarterly, based on performance targets established by
  the Board of Directors, a portion of which is to be paid in the form of
  shares of Common Stock of the Company (Common Stock) at fair market
  value.  For the quarter ended December 31, 1997, the Company awarded Mr.
  Millard a bonus and in connection therewith issued Mr. Millard 5,373
  shares of Common Stock valued at $11,350.  For the quarter ended March
  31, 1998, the Company awarded Mr. Millard a bonus and in connection
  therewith issued Mr. Millard 6,882 shares of Common Stock valued at
  $17,550.  No bonuses were awarded for the three month periods ended June
  30, 1998 and September 30, 1998.
<PAGE>

       In 1997, the Company entered into an employment agreement with
  Robert C. Montgomery, pursuant to which Mr. Montgomery agreed to serve as
  Chief Operating Officer and Executive Vice President of the Company.
  Under the Agreement, Mr. Montgomery is eligible to receive an annual
  incentive bonus of $100,000 under the Company's Senior Management Bonus
  Plan, payable quarterly, a portion of which is to be paid in the form of
  shares of Common Stock at fair market value.  For the quarter ended
  December 31, 1997, the Company awarded Mr. Montgomery a bonus and in
  connection therewith issued Mr. Montgomery 2,686 shares of Common Stock
  valued at $5,675.  For the quarter ended March 31, 1998, the Company
  awarded Mr. Montgomery a bonus and in connection therewith issued Mr.
  Montgomery 3,441 shares of Common Stock valued at $8,775.  No bonuses
  were awarded for the three month periods ended June 30, 1998 and
  September 30, 1998.

       In 1997, the Company entered into an employment agreement with
  Daniel D. Giacopelli, pursuant to which Mr. Giacopelli agreed to serve as
  Chief Technology Officer and Executive Vice President of the Company.
  Under the Agreement, Mr. Giacopelli is eligible to receive an annual
  incentive bonus of $100,000 under the Company's Senior Management Bonus
  Plan, payable quarterly, a portion of which is to be paid in the form of
  shares of Common Stock at fair market value.  For the quarter ended
  December 31, 1997, the Company awarded Mr. Giacopelli a bonus and in
  connection therewith issued Mr. Giacopelli 2,686 shares of Common Stock
  valued at $5,675.  For the quarter ended March 31, 1998, the Company
  awarded Mr. Giacopelli a bonus and in connection therewith issued Mr.
  Giacopelli 3,441 shares of Common Stock valued at $8,775.  No bonuses
  were awarded for the three month periods ended June 30, 1998 and
  September 30, 1998.

       During the fiscal year ended September 30, 1998, the Company paid
  the law firm of Hamman and Benn aggregate fees of $479,913 for legal
  services, which payments were comprised of $300,060 in cash and 101,615
  shares of Common Stock valued at $179,853.  The Company also paid the law
  firm of Bellows and Bellows aggregate fees of $44,403 for legal services,
  which payments comprised of $426 in cash and 21,880 shares of Common
  Stock valued at $43,977.

       Each of the forgoing issuances of the Company's Common Stock did not
  involve a public offering of securities, and therefore was exempt from
  registration pursuant to Section 4(2) of the Securities Act of 1993, as
  amended.
<PAGE>

  Item 6.  Selected Financial Data

       The following table is a summary of certain condensed statement of
  operations and balance sheet information of the Company.   The table sets
  forth-selected historical financial data of the Company for the years
  ended September 30, 1998, 1997, 1996, 1995 and 1994.  The selected
  financial data were derived from audited financial statements.  The
  summary should be read in conjunction with financial statements and notes
  thereto appearing elsewhere in this report.
<TABLE>
<CAPTION>

                                     ---------Year ended September 30,-------
                                     1998     1997     1996     1995     1994
  <S>                                -------  -------  -------  -------  -------
  Statement of operations data:    <C>      <C>      <C>      <C>      <C>
    Net product sales              38,784   48,417   27,271   33,031   17,734
    Net royalty and royalty
    settlement revenue              1,652      551      646      540      281
    Total revenue                  40,436   48,968   27,917   33,571   18,015
       Cost of Sales               30,571   37,881   23,906   27,530   13,326
                                  -------  -------  -------  -------  -------
                                    9,865   11,087    4,011    6,041    4,689

    Operating expenses             20,697   16,753   19,936   27,042   33,809
    Restructuring                       0        0   11,019        0        0
                                 --------  -------  -------   -------  -------
    Loss from operations          (10,832)  (5,666) (26,944) (21,001) (29,120)
       Net other income/
       (expense)                      428      364      351    1,340    1,187
                                 --------  -------  -------   -------  -------
    Net loss                      (10,404)  (5,302) (26,593) (19,661) (27,933)

    Less - amortization of
    preferred stock beneficial
    conversion discount                 0   (2,222)       0        0        0

    Less - cumulative dividend
    on redeemable preferred
    stock                            (895)    (395)       0        0        0
                                  -------  -------  -------  -------  -------

    Loss applicable to
    common shares                 (11,299)  (7,909) (26,593) (19,661) (27,933)
                                 --------  -------  -------  -------  -------
    Basic and diluted loss
    per common share                (0.34)   (0.25)   (0.96)   (0.84)   (1.25)
                                 ========  =======  =======  =======  =======
<CAPTION>
                                 Sept.30, Sept.30, Sept.30,  Sept.30, Sept.30,
                                     1998     1997     1996     1995     1994
    Balance sheet data:            -------   -------  -------  -------  -------
    <S>                            <C>      <C>      <C>      <C>      <C>
    Working capital                28,193   39,033   26,557   25,930   46,071
    Total assets                   48,812   57,553   41,939   54,747   61,242
    Long-term debt                      0        0    1,500   10,000        0
    Stockholder's equity           20,682   25,699   30,770   37,956   56,318
</TABLE>
<PAGE>

  Item 7.  Management's Discussion and Analysis of Financial Condition  and
           Results of Operation

  Introduction

       The Company designs, develops, manufactures and markets products
  based on its proprietary interface technologies, which allows most
  standard wireline customer premises equipment -- phones, facsimile
  machines, computer modems, PBXs, and key systems, among others -- to
  operate over wireless telecommunications networks.  Currently, the
  Company is devoting a substantial portion of its resources to
  international market development, extension of its core product line to
  new wireless standards, expansion, protection and licensing of its
  intellectual property rights and development of underlying radio
  technology.

       The Company's operating expense levels are based in large part on
  expectations of future revenues.  If anticipated sales in any quarter do
  not occur as expected, expenditure and inventory levels could be
  disproportionately high, and the Company's operating results for that
  quarter, and potentially for future quarters, could be adversely
  affected.  Certain factors that could significantly impact expected
  results are described in Cautionary Statements Pursuant to the Securities
  Litigation Reform Act that is Exhibit 99 to this Form 10-K.


  Overview

       The Company has seen substantial growth in the market for FWTs in
  both WLL and WAA systems.  The Company encountered heightened activity
  during fiscal year 1998 that gives it reason to believe that the FWT
  market is maturing.  Excluding the Motorola WLL project in Hungary during
  fiscal year 1997, the Company quoted more contracts, shipped more product
  (42% more than fiscal year 1997) and observed more data that confirmed
  momentum in the FWT market than during any previous period.  The major
  trends driving the market include a broad consumer acceptance of cellular
  communications, rapid privatization of telecommunications in developed
  and developing countries, adoption of digital wireless transmission
  standards that enhance network capacity and service, service network
  providers' acceptance of FWTs as cost-effective answers to customer
  demand for improved telecommunications and PCS licensing that will drive
  down the price of wireless communications and expand the number of users
  within the U.S.  However, poor economic conditions in Asia, which
  negatively affected the Company's prospects during fiscal year 1998, may
  continue for some time.

       WLL, which is the core of the Company's FWT business in developing
  countries, involves cellular infrastructure employed predominately (and
  sometimes exclusively) for the fixed location user.  Continued growth of
  the WLL market depends primarily on the pricing of WLL airtime service to
  the customer relative to available wireline prices, the relative local
  availability of WLL and wireline service, operator regulatory constraints
  on fixed cellular, and availability of money in a given country.  These
  factors have contributed to the increase in the number of new WLL
  networks commissioned in 1998.  Because FWT deployment lags network
  commissioning, the Company believes the pent up opportunity for its
  products is very large.
<PAGE>

       WAA, which represents the majority of the Company's sales in
  developed countries, has primarily involved wireless back-up of existing
  wireline systems, and where wireline service is unavailable or
  unreliable, using mobile cellular networks built primarily for handheld
  cellular phone users.  Management anticipates that additional FWT markets
  for WAA applications will develop as existing cellular networks mature
  and new networks and services are introduced.  As capacity and price
  competition increase on new and existing cellular networks and the growth
  rate in new cellular phone subscribers slows, mobile cellular operators
  will be forced to look for new revenue sources.  FWTs provide an
  excellent opportunity for cellular network operators, as they are less
  costly to support than mobile units (permanently linked to a specific
  cell site), generate more average airtime, and operate mainly at off-peak
  times.  The number of FWTs presently operating on WAA networks exceeds
  that of WLL and is driven by the relative price for airtime, as well as
  by the large installed base of mobile networks worldwide.  The Company
  has a number of undertakings that embody its strategy to capitalize on
  the growth it anticipates for FWTs.  During fiscal year 1998, the Company
  added new personnel in each of its international sales offices and will
  continue to strengthen and build its sales and marketing organizations.

       The Company's product development program is designed to result in a
  line of FWTs over the next two years that will address the cellular radio
  standards projected to serve 85% of all cellular subscribers in the year
  2000.  During fiscal year 1998, the Company's FWTs continued to gain
  market position on its major radio standards (See Company Strategy in
  Item 1 above for more detail).

       The Company introduced several new PHONECELLs during fiscal year
  1998.  These included: two new analog AMPS FWTs, the SX3(i) AMPS and the
  SX3(e) AMPS; a new digital TDMA FWT, the SX2(e) TDMA; and a new digital
  CDMA FWT, the SX2(e) CDMA.  All of these products cost less to make and
  have more features than predecessor versions.  The SX3 AMPS units include
  a transceiver that was designed by the Company.

       The Company expects to introduce additional PHONECELLs during fiscal
  year 1999.  The most significant new FWT is the SX4 GSM FWT.  The SX4 GSM
  unit includes a transceiver that was designed by the Company, as well as,
  the Company's ASIC chip.  The ASIC chip replaces some 75 electronic
  components and a circuit board, which significantly reduces the cost from
  the predecessor version.

       The Company has  been negotiating licenses  with a  number of  large
  international telecommunications companies.   The Company  has agreed  to
  provide component circuit boards to QUALCOMM Incorporated.  During fiscal
  year 1998, the Company agreed to license certain technologies to Ericsson
  Radio Systems AB and to Nokia Mobile Phone Ltd.
<PAGE>

  Results of Operations


  Fiscal Year 1998 Compared to Fiscal Year 1997

       Net Product Sales.  Net product sales of $38.8 million for the year
  ended September 30, 1998 decreased from $48.4 million for the year ended
  September 30, 1997.  Net product sales, excluding net product sales to a
  large Motorola WLL project in Hungary during the year ended September 30,
  1997, more than doubled from $17.7 million for the year ended September
  30, 1997 to $38.8 million for the year ended September 30, 1998.  This
  increase primarily resulted from shipments to WLL projects in The
  Philippines and Guinea, West Africa.

       Royalty  and  Royalty  Settlement  Revenue.    Royalty  and  royalty
  settlement revenue  increased  to  $1.7 million  during  the  year  ended
  September 30,  1998, due  primarily to  the  royalty settlement  of  $1.2
  million with ORA Electronics, Inc. (See financial statement footnote 20)

       Engineering and Development Expenses.  Fiscal year 1998 engineering
  and development expenses of $8.2 million, increased 36% or $2.2 million
  over fiscal year 1997.  The increase relates to the Company's increased
  focus on developing additional analog and digital  FWTs, including its
  acquisition of Wireless Domain, Incorporated, which significantly
  increased the Company's engineering staff.

       Selling and Marketing Expenses.  Selling and marketing expenses for
  the year ended September 30, 1998 increased 61%, or $2.7 million,
  compared to the same period in fiscal year 1997.  The increase was
  primarily a result of the Company's efforts to market its new products
  and increase its sales force to support worldwide sales coverage.

       General and Administrative Expenses (G&A).  G&A for fiscal year 1998
  decreased 25% or $1.5 million compared to the same period in fiscal year
  1997.  The decrease is primarily attributable to the reduction or
  elimination of expenditures and the leveraging of available resources.

       Provision for doubtful accounts.  The provision for doubtful
  accounts expense decreased during fiscal year 1998 from fiscal year 1997,
  due to an improvement in the Company's collections experience.

       Amortization.  Amortization expense increased during fiscal year
  1998 from fiscal year 1997, due to the amortization of goodwill recorded
  in connection with the acquisition of Wireless Domain, Incorporated.

       Other Income.  Other income during fiscal year 1998 decreased by
  $0.5 million compared to fiscal year 1997.  The decrease is primarily due
  to the settlement of litigation with Global Tel*Link for $0.6 million
  during fiscal year 1998.

       Net Loss.  The fiscal year 1998 net loss of $10.4 million compares
  to a net loss of $5.3 million in fiscal year 1997.  The change in result
  for fiscal year 1998 resulted from lower overall volumes and increased
  investments in engineering and development and selling and marketing
  expenses in fiscal year 1998 compared to fiscal year 1997.

       Net loss applicable to common shares.  After giving effect to the
  cumulative preferred stock dividend of $0.9 million in fiscal year 1998,
  net loss applicable to common shares of $11.3 million, or ($0.34) per
  share, compares to a net loss applicable to common shares of $7.9 million
  or ($0.25) per share, in fiscal year 1997.  Fiscal year 1997 amounts
  include the preferred stock beneficial conversion discount of $2.2
  million and the cumulative preferred stock dividend of $0.4 million.
<PAGE>

  Fiscal Year 1997 Compared to Fiscal Year 1996

       Total Revenue.  For the year ended September 30, 1997, total revenue
  increased 79% to $50.0 million from $27.9 million in fiscal year 1996.
  Sales of FWTs increased approximately 96% to $39.7 million in fiscal year
  1997, due primarily to a $15.3 million increase in shipments to the WLL
  project in Hungary.  Sales of WAS products increased 26% to $8.8 million
  in 1997.

       Engineering and Development Expenses.  Fiscal year 1997 engineering
  and development expenses of $6.0 million, increased 23% over fiscal year
  1996.  This resulted from the Company's increased focus on developing
  analog and digital FWTs that will operate on additional radio standards.

       Selling and Marketing Expenses.  Fiscal year 1997 selling and
  marketing expenses decreased 28% compared to fiscal year 1996. The
  Company, as part of the restructuring program, realigned its worldwide
  sales organization during fiscal year 1996.  Lower levels of selling and
  marketing expense were maintained in fiscal year 1997.

       General and Administrative Expenses (G&A).  Fiscal year 1997 G&A
  decreased 13% compared to fiscal year 1996.  The decrease is essentially
  attributable to the reduction or elimination of expenditures, primarily
  through headcount reductions, achieved through the restructuring program
  implemented during the second and third fiscal quarters of fiscal year
  1996.

       Allowance for Doubtful Accounts.  The allowance for doubtful account
  expense decreased from fiscal year 1996 to fiscal year 1997, due to the
  collection of $0.5 million account receivable from one customer that was
  fully reserved for during fiscal year 1996 and an improvement in the
  Company's collection experience.

       Amortization Charges.  Fiscal year 1997 amortization charges
  decreased by 43% compared to fiscal year 1996.  Intangible assets written
  off as part of restructuring and impairment charges during fiscal year
  1996 significantly reduced related amortization charges.  The write-off
  reduced the intangible asset balance and related amortization charges in
  fiscal year 1997 compared to fiscal year 1996.

       Other Income (Expense).  Other income for the year ended September
  30, 1997, decreased by approximately $0.1 million compared to fiscal year
  1996.  This decrease was primarily the result of lower royalty income,
  which was partially offset by higher interest income, as cash balances in
  interest bearing accounts were higher in 1997 compared to 1996.

       Net Loss.  The fiscal year 1997 net loss of $5.3 million compares to
  a net loss of $26.6 million in fiscal year 1996, an improvement of 80%.
  The improvement in fiscal year 1997 resulted from increased net sales and
  gross margins and lower operating expenses.  The fiscal year 1996 net
  loss included restructuring and impairment charges of $11.0 million.

       Loss applicable to common shares.  After giving effect to
  amortization of the preferred stock beneficial conversion discount of
  $2.2 million and cumulative preferred stock dividend of $0.4 million for
  fiscal year 1997 (see financial statement footnote 11), loss applicable
  to common shares of $7.9 million, or ($0.25) per share, compares to loss
  applicable to common shares of $26.6 million, or ($0.96) per share for
  fiscal year 1996.
<PAGE>

  Liquidity and Capital Resources

       At September 30, 1998, the Company had $19.9 million in cash and
  cash equivalents and working capital of $28.2 million.

       Cash used for operations was $5.7 million for the year ended
  September 30, 1998, compared to $0.5 million of cash provided
  for the same period in 1997, due primarily to the increased operating
  loss.

       Cash used for capital expenditures and other investing activities
  was $3.0 million for the year ended September 30, 1998 compared to $3.6
  million for the same fiscal period last year.  The Company spent nearly
  the same amount for capital expenditures in both periods.  In 1997, the
  Company used $0.5 million of cash to increase its equity position in
  Wireless Domain, Inc.

       Financing activities provided $0.2 million during fiscal year 1998,
  compared to $19.1 million during fiscal year in 1997.  The fiscal year
  1997 amount includes proceeds to the Company of $18.8 million resulting
  from the issuance of redeemable preferred stock.

       In 1997, the Company entered into a Loan and Security Agreement with
  Sanwa Business Credit Corporation that, among other things, provides a
  credit facility with a loan limit of $20.0 million (the Loan).
  Borrowings under the Loan are subject to borrowing base requirements and
  other restrictions.  Under the Loan and Security Agreement, the Company
  is required to comply with certain affirmative and negative covenants.
  The Loan matures on April 23, 2000.  As of September 30, 1998, the
  Company's borrowing capacity under the Loan provisions was $6.1 million
  although there have been no borrowings and none are contemplated in the
  near-term.  The Company will use the Loan, as necessary, to provide
  working capital to support very large orders.

       In 1997, the Company  issued 20,000 shares  of Series A  Convertible
  Preferred Stock (the Preferred  Stock) for $18.8 million  that is net  of
  issuance cost  of  $1.2  million.    The  Preferred  Stock  automatically
  converts to  Common  Stock  on  April 16,  1999,  or  October  16,  1999,
  depending on the  conversion price and  includes the equivalent  of a  5%
  annual stock dividend.  Holders of  the Preferred Stock are entitled,  at
  their option,  subject  to  trading volume  and  other  restrictions,  to
  convert Preferred  Stock  into  shares  of  Common  Stock  using  defined
  conversion formulas  based  on the  Nasdaq  closing bid  prices  for  the
  Company's Common Stock.  Holders of the Preferred Stock are not  entitled
  to vote on matters submitted for vote to the stockholders of the Company.
  As of  September 30,  1998,  3,494 shares  of  Preferred Stock  had  been
  converted into 1,581,170 shares of Common Stock.

       The Company is using much of  the capital raised from the  Preferred
  Stock offering  to fund  new product  development.   Beyond its  specific
  research and  product development  needs, expected  future uses  of  cash
  include  working  capital  requirements,  marketing  and  sales   support
  programs  in  anticipation  of   future  revenues  and  certain   capital
  expenditures.   Based  upon  its  current  operating  plan,  the  Company
  believes its existing  capital resources, including  the credit  facility
  and proceeds from the  issuance of Preferred Stock,  should enable it  to
  maintain its current  and planned  operations through  fiscal year  1999.
  Cash requirements may vary and are difficult to predict given the  nature
  of the developing markets targeted by the Company.  The amount of royalty
  income from the Company's licensees is  unpredictable, but could have  an
  impact on the Company's actual cash flow.

       The Company requires letters of  credit or qualification for  export
  credit insurance underwritten by  third party credit insurance  companies
  or the Export-Import Bank of the  United States on a substantial  portion
  of its  international sales  orders. Also,  to  mitigate the  effects  of
  currency fluctuations on the Company's results of operations, the Company
  endeavors to  conduct  all  of its  international  transactions  in  U.S.
  dollars.  To date, the Company's  sales have not been adversely  affected
  by  currency  fluctuations;  however,  as  the  Company's   international
  operations grow, foreign exchange or the inflation of a foreign  currency
  may pose greater risks for the  Company, and the Company may be  required
  to develop and implement additional strategies to manage these risks.
<PAGE>

       From October 2, 1998, until November 20, 1998 (the last  practicable
  date), the price for the Company's  Common Stock has closed in the  range
  of $0.969  to  $0.594 per  share.   On  November  12, 1998,  the  Company
  received notification from Nasdaq that the Company has a 90-day period to
  bring itself back into compliance with the Nasdaq's rules, which require,
  among other things, that listed companies maintain a minimum stock  price
  per share of one-dollar.  On October 30, 1998, the Company announced that
  its Board  of Directors  will seek  shareholder  approval at  its  annual
  shareholder meeting on January 26, 1999, to effect a Reverse Stock Split.
  By effectuating a Reverse Stock Split,  the Company expects to raise  its
  Share price above one-dollar and bring  itself back into compliance  with
  this listing requirement.

       If the Company's stock is delisted from the Nasdaq National Market
  System, it would continue to be traded over the counter, but the
  delisting would likely adversely affect the attractiveness of the stock
  to many investors, including many institutional investors.  In addition,
  delisting of the stock would give rise to a right on the part of the
  holders of the Company's Series A Convertible Preferred Stock (the
  Preferred Stock) to redeem their Preferred Stock at a redemption price
  per Share equal to the greater of (i) $1,250 and (ii) the product of the
  conversion rate at the time of delisting and the closing bid price
  immediately prior to that date.  As of November 20, 1998, 13,506 Shares
  of Preferred Stock were issued and outstanding.


  Impact of the Year 2000 Issue

       Recently, national attention has focused on the potential problems
  and associated costs resulting from computer programs that have been
  written using two digits rather than four to define the applicable year.
  These programs treat all years as occurring between 1900 and 1999 and do
  not self-correct to reflect the upcoming change in the century.  If not
  corrected, computer applications could fail or create erroneous results
  by or at the Year 2000.

       Management has conducted a formal assessment of its significant
  information technology systems, including computers used in its
  production and manufacturing functions.  Based upon this assessment,
  management believes that only minor modifications will be required to its
  internal software and hardware (imbedded chips) so that its computer
  systems will function properly with respect to dates in the Year 2000 and
  thereafter.  The cost of such modifications, including testing and
  implementation, is not expected to have a material adverse effect on the
  Company's results of operations and will be funded through operating cash
  flows.  The Company expects to complete the implementation (final) phase
  of changes to its internal computer systems by January 31, 1999, however,
  there can be no assurance that such schedule will be met.

       The Company does not conduct any of its purchase transactions
  through computer systems that interface directly with suppliers.  The
  Company has also initiated a formal assessment of its significant
  suppliers to determine the extent to which the Company would be
  vulnerable if those third parties' fail to remedy Year 2000 issues.  To
  date, the Company has received written responses from approximately 1,200
  of its 1,400 suppliers (86%).  The Company has evaluated these responses
  and is now monitoring the progress of suppliers that are not fully ready
  for the Year 2000.  Where the Company determines that critical suppliers
  will not be ready for the Year 2000, the Company will take appropriate
  actions.
<PAGE>

       With respect to its customers, the Company currently has no material
  systems that interface directly with customers.  Further, the Company has
  not entered into any significant supply contracts that extend beyond
  September 30, 1999.  The Company's large customers beyond December 31,
  1999 will likely be new customers due to the project nature of its
  business.  In addition, as a global company that operates in many
  different countries, some of which may not be addressing the Year 2000
  problem as aggressively as the United States, there can be no assurances
  that future customers will be Year 2000 compliant.  Moreover, because
  markets for the Company's products are dependent on third parties, such
  as wireless local loop network providers, management cannot fully assess
  the impact that the Year 2000 problem will have on future sales.

       The Company has reviewed each of its product lines and has
  determined that its products will operate properly in the Year 2000 and
  beyond.  However, for some industries, the Company's products are
  integrated with other company's products and sold as a combined product.
  There can be no assurances that such combined products, current and
  future, will operate properly in the Year 2000 and beyond.

       The cost of the Company's efforts to prepare for the Year 2000 which
  is estimated at $100,000 (including approximately $30,000 spent to date),
  and the date on which the Company believes it will complete its internal
  Year 2000 compliance efforts, reflect management's current estimates
  based upon available information.  Management will continue to monitor
  this issue, particularly the possible impact of third-party Year 2000
  compliance on the Company's operations, and will modify its estimates if
  warranted.

       Management believes that it has an effective program in place
  to resolve its internal Year 2000 issues in a timely manner.  Nevertheless,
  because it is not  possible to anticipate  all future  outcomes, especially
  when third parties are  involved, there could  be circumstances in which the
  Company is adversely effected by Year 2000 problems.  The loss of revenue
  from such occurrences has not been estimated.


  Forward Looking Information

       Statements  contained  in   this  filing,   other  than   historical
  statements, consist of forward looking information.  The Company's actual
  results may vary considerably  from those discussed in  this filing as  a
  result of various  risks and  uncertainties.   For example,  there are  a
  number of uncertainties  as to  the degree  and duration  of the  revenue
  momentum, which could impact  the Company's ability  to be profitable  as
  lower sales may  likely result in  lower margins.   In addition,  product
  development expenditures, which are  expected to benefit future  periods,
  are likely to have a negative  impact on near term earnings. Other  risks
  and uncertainties,  which are  discussed in  Exhibit 99  to this  filing,
  include the  risk that  technological change  will render  the  Company's
  technology obsolete, the  risk of  litigation, the  Company's ability  to
  develop  new  product,  the  Company's  dependence  on  contractors   and
  Motorola, the Company's ability to maintain quality control, the risk  of
  doing  business  in  developing  markets,  the  Company's  dependence  on
  research and  development, the  uncertainty  of additional  funding,  the
  potential for redemption of  preferred stock, the  effects of control  by
  existing shareholders,    global  economic  conditions,  intense industry
  competition, the uncertainty  in  the  development  of  wireless  service
  generally, and the risk that the Company's Common Stock may  be  delisted
  from the Nasdaq National Market System for failure to  increase its stock
  price over one dollar.
<PAGE>

  Item 7a.  Quantitative and Qualitative Disclosure about Market Risk

       On March  2,  1998,  the Company  received  300,000  shares  of  ORA
  Electronics, Inc.  common  stock (ORA  stock)  in connection  with  the
  settlement of litigation  (See financial statement  footnotes 7 and  20).
  ORA stock is traded on Nasdaq's Over The Counter (OTC) system.   Although
  ORA stock is subject to price fluctuations associated with all securities
  that are traded on the OTC system,  the Company has the right to  receive
  additional shares of  ORA stock to  ensure the fair  market value of  the
  settlement consideration received in stock is equivalent to $1.5  million
  on February 1, 2000.

       The Company frequently invests  available cash and cash  equivalents
  in short term  instruments such as:  certificates of deposit,  commercial
  paper and money market accounts.   Although the rate of interest paid  on
  such  investments  may  fluctuate  over  time,  each  of  the   Company's
  investments is made  at a fixed  interest rate over  the duration of  the
  investment.  All  of these investments  have maturities of  less than  90
  days.  The Company  believes its exposure to  market risk fluctuates  for
  these investments is not material as of September 30, 1998.


  Item 8.  Financial Statements and Supplementary Data

  1.   The following financial statements are included in Part II, Item 8
       of this Form 10-K.
        Report of Independent Auditors ..................     17
        Consolidated Balance Sheets
        as of September 30, 1998 and 1997 ...............     18
        Consolidated Statements of Operations
        for the years ended September 30, 1998,
        1997 and 1996 ...................................     19
        Consolidated Statements of Stockholders'
        Equity for the years ended September 30,
        1998, 1997 and 1996 .............................     20
        Consolidated Statements of Cash Flows
        for the years ended September 30, 1998,
        1997 and 1996 ...................................     21
        Notes to Consolidated Financial Statements ......     22

<PAGE>

                       Report of Independent Auditors



  The Board of Directors
  Telular Corporation


  We have audited the accompanying consolidated balance sheets of Telular
  Corporation as of September 30, 1998 and 1997, and the related
  consolidated statements of operations, stockholders' equity, and cash
  flows for each of the three years in the period ended September 30, 1998.
  Our audits also included the financial statement schedules listed in the
  Index at 14(a).  These financial statements and schedules are the
  responsibility of the Company's management.  Our responsibility is to
  express an opinion on these financial statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing
  standards.  Those standards require that we plan and perform the audit to
  obtain reasonable assurance about whether the financial statements are
  free of material misstatement.  An audit includes examining, on a test
  basis, evidence supporting the amounts and disclosures in the financial
  statements.  An audit also includes assessing the accounting principles
  used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation.  We believe that our audits
  provide a reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the consolidated financial
  position of Telular Corporation at September 30, 1998 and 1997, and the
  consolidated results of its operations and its cash flows for each of the
  three years in the period ended September 30, 1998, in conformity with
  generally accepted accounting principles.  Also, in our opinion, the
  related financial statement schedules when considered in relation to the
  basic financial statements taken as a whole, present fairly in all
  material respects the information set forth therein.

  /s/ ERNST & YOUNG LLP

  October 26, 1998
<PAGE>
<TABLE>
<CAPTION>

                             Telular Corporation

                         Consolidated Balance Sheets
                      (In Thousands, Except Share Data)
                                                 September 30
                                               1998        1997
                                               -------     -------
  <S>                                        <C>         <C>
  Assets
  Current assets:
   Cash and cash equivalents                 $ 19,854    $ 28,451
   Receivables:
    Trade, less an allowance for doubtful
     accounts of $112 and $426, respectively    4,468       6,527
    Related parties                             1,268       4,670
                                              -------      ------
                                                5,736      11,197
    Inventories, net                           11,594       9,431
    Prepaid expenses and other current assets     853         500
                                              -------      ------
  Total current assets                         38,037      49,579
  Property and equipment, net                   5,496       3,611
  Other assets:
   Excess of cost over fair value of net
   assets acquired,less accumulated
   amortization of $785 in 1998                 4,111           0
   Intangible assets, less accumulated
   amortization of $845 and $384, respectively    250         461
   Investment in affiliate                          0       3,851
   Deposits and other                             918          51
                                              -------      ------
                                                5,279       4,363
                                              -------      ------
  Total assets                               $ 48,812    $ 57,553
                                             ========    ========

<PAGE>

  Liabilities and stockholders' equity
  Current liabilities:
   Revolving line of credit                  $      0      $    0

   Accounts payable:
    Trade                                       5,138       3,764
    Related parties                             1,185       3,640
   Accrued liabilities                          3,521       3,142

  Total current liabilities                     9,844      10,546

  Commitments and Contingencies                     0           0

  Redeemable Preferred Stock:
  Series A convertible preferred stock,
    $.01 par value; $17,709 and $20,386
    liquidation preference at September
    30, 1998 and September 30, 1997,
    respectively; 21,000 shares authorized
    at September 30, 1998 and September 30,
    1997; 16,506 and 20,000 shares
    outstanding at September 30, 1998
    and September 30, 1997, respectively       18,286      21,308

  Stockholders' equity:
   Preferred stock, $.01 par value;
    9,979,000 shares authorized at                          
    September 30, 1998 and 1997; none
    outstanding                                     0           0
   Common stock, $.01 par value;
    40,000,000 shares authorized;
    34,137,190 and 31,684,073 outstanding,       
    at September 30, 1998 and 1997,
    respectively                                  346         322
   Additional paid-in capital                 117,326     111,143
   Deficit                                    (95,458)    (84,159)
   Unrealized gain on investments                  75           0
   Treasury stock, 560,000 shares at cost      (1,607)     (1,607)
                                              -------      ------
  Total stockholders' equity                   20,682      25,699
                                              -------      ------
  Total liabilities and stockholders' equity $ 48,812    $ 57,533
                                             ========    ========
<FN>
   See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                             Telular Corporation
                    Consolidated Statements of Operations
                      (In Thousands, Except Share Data)

                                                Year ended September 30
                                               1998        1997      1996
                                            -------     -------   -------
  <S>                                      <C>         <C>       <C>
  Revenue
    Net product sales to unrelated parties $ 38,784    $ 27,227  $ 18,642
    Net product sales to related parties          0      21,190     8,629
                                            -------     -------   -------
      Total net product sales                38,784      48,417    27,271

    Royalty and royalty settlement revenue    1,652         551       646
                                            -------     -------   -------
      Total revenue                          40,436      48,968    27,917
  Cost of sales                              30,571      37,881    23,906
                                            -------     -------   -------
                                              9,865      11,087     4,011
  Operating Expenses
    Engineering                               8,159       6,007     4,888
    Selling                                   7,248       4,510     6,254
    General and administrative                4,380       5,863     6,754
    Provision for (recovery of)
    doubtful accounts                           (72)       (231)      974
    Amortization                                982         604     1,066
    Restructuring and impairment charges          0           0    11,019
                                            -------     -------   -------
  Loss from operations                      (10,832)     (5,666)  (26,944)

  Other income (expense)
   Interest income                            1,327       1,009       936
   Interest expense                             (19)        (47)     (293)
   Equity in net loss of investments in                             
   affiliates                                     0        (204)      (41)
   Other                                       (880)       (394)     (251)
                                            -------     -------   -------
                                                428         364       351
                                            -------     -------   -------
  Net loss                                  (10,404)     (5,302)  (26,593)
  Less:  Amortization of
   redeemable preferred stock
   beneficial conversion discount                 0      (2,222)        0
  Less:  Cumulative dividend
   on redeemable preferred stock               (895)       (385)        0
                                            -------     -------   -------
  Loss applicable to common shares         $(11,299)   $ (7,909) $(26,593)

  Basic and diluted loss per common share    $ (.34)     $ (.25)    $(.96)
                                            ========    ========   =======
  Weighted-average number of
   common shares outstanding             33,229,366  31,507,622  27,655,964

<FN>
  See accompanying notes.

</TABLE>
<PAGE>
<TABLE>

                             Telular Corporation

               Consolidated Statements of Stockholders' Equity
                               (In Thousands)


                                            Additional                        Total
                           Preferred Common  Paid-in   Unrealized Treasury  Stockholder's
                             Stock    Stock  Capital      Gain      Stock     Equity
                           --------- ------  ---------  ---------- -------- ------------
  <S>                            <C>   <C>        <C>   <C>        <C>          <C>
  Balance at October 31, 1995    $ 0   $242       $ 0   $ (49,657) $(1,607)     $ 37,955
  Proceeds from issuances of
   common stock                    0      4       551           0        0           555
  Conversion of debentures
   into 6,655,315 shares
   of common stock                 0     67    16,598           0        0        16,665
  Stock issued in connection
   with the investment in
   Wireless Domain                 0      3     2,185           0        0         2,188
  Net loss for year ended
   September 30, 1996              0      0         0     (26,593)       0       (26,593)
                           --------- ------  ---------  ---------- -------- ------------
  Balance at September 30, 1996    0    316   108,311     (76,250)  (1,607)       30,770
  Proceeds from issuances
   of common stock                 0      1       329           0        0           330
  Conversion of debentures
   into 378,200 shares of
   common stock                    0      4     1,551           0        0         1,551
  Stock issued in connection
   with the investment in
   Wireless Domain                 0      1       694           0        0           695
  Amortization of redeemable
   preferred stock beneficial
   conversion discount             0      0         0      (2,222)       0        (2,222)
  Dividends on redeemable
   preferred stock                 0      0         0        (385)       0          (385)
  Stock issued for
   services rendered               0      0       258           0        0           258
  Net loss for year
   ended September 30, 1997        0      0         0      (5,302)       0        (5,302)
                           --------- ------  ---------  ---------- -------- ------------
  Balance at September 30, 1997    0    322   111,143     (84,159)       0        25,699

  Proceeds from issuances of
   common stock                    0      2       148           0        0           150
  Conversion of preferred
   stock to common stock           0     15     3,753           0        0         3,768
  Stock issued in connection
   with the purchase of
   Wireless Domain                 0      5     1,714           0        0         1,719
  Deferred compensation
   related to stock options        0      0       138           0        0           138
  Dividends on redeemable
   preferred stock                 0      0         0        (895)       0          (895)
  Stock issued in connection
   with services relating to
   redeemable preferred stock      0      1       149           0        0           150
  Stock issued for services
   and compensation                0      1       281           0        0           282
  Unrealized gain on investments   0      0         0           0       75            75
  Net loss for year ended
   September 30, 1998              0      0         0     (10,404)       0       (10,404)
                           --------- ------  ---------  ---------- -------- ------------
  Balance at September 30, 1998  $ 0  $ 346 $ 117,326   $  (95,458)    $ 75      $ 20,682
                            ======== ====== =========   ==========  ======= ============
<FN>
 See accompanying notes.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                            Telular Corporation                                                  
                    Consolidated Statements of Cash Flows
                               (In Thousands)


                                                  Year ended September 30
                                                 1998      1997       1996
                                             --------- --------- ---------
  <S>                                       <C>        <C>       <C>
  Operating activities
  Net loss                                  $ (10,404) $ (5,302) $ (26,593)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
    Depreciation                                1,622     1,016      1,064
    Amortization                                  982       604      1,066
    Inventory obsolescence expense              1,819       551      2,958
    Compensation expense related
     to stock options and grants                  138       179         99
    Interest on debentures                          0        55        209
    Common stock issued for
     services and compensation                    432        23          0
    Restructuring and impairment charges            0       319      9,839
    Equity in net loss of investments               0       204         41
    Loss on disposal of property and equipment      0         0         16
    Changes in assets and liabilities:
     Receivables                                2,840      (199)      (545)
     Related party receivables                  3,402    (3,225)     4,029
     Inventories                               (3,982)    2,810     (4,782)
     Prepaid expenses, deposits,  and other    (1,117)      (35)       216
     Accounts payable                          (1,470)    1,970     (1,363)
     Accrued liabilities                           18     1,550     (1,207)
                                             --------- --------- ---------
  Net cash provided by (used in)
   operating activities                        (5,720)      520    (14,953)

  Investing activities
  Investment in Wireless Domain                     0      (500)    (1,000)
  Acquisition of property and equipment        (2,877)   (2,620)    (1,267)
  Acquisition of licenses and technology         (150)     (525)         0
  Proceeds from disposal of equipment               0         0        561
                                             --------- --------- ---------
  Net cash used in investing activities        (3,027)   (3,645)    (1,706)
<PAGE>
  Financing activities
  Proceeds from issuances of common stock         150       278        459
  Revolving line of credit                          0         0    (10,000)
  Proceeds from issuance of
   redeemable preferred stock                       0    18,808          0
  Proceeds from convertible debentures              0         0     18,000
  Payment of deferred financing costs               0      (348)      (515)
                                             --------- --------- ---------
  Net cash provided by financing activities       150    18,738      7,944

  Net increase (decrease) in cash
   and cash equivalents                        (8,597)   15,613     (8,715)
  Cash and cash equivalents,
   beginning of period                         28,451    12,838     21,553
                                             --------- --------- ---------
  Cash and cash equivalents, end of period   $ 19,854  $ 28,451   $ 12,838

  Supplemental cash flow information
  Interest paid                                  $ 19      $ 47       $ 84
<FN>
  See accompanying notes.
</TABLE>
<PAGE>

                             Telular Corporation
                 Notes to Consolidated Financial Statements
                      (In Thousands, Except Share Data)


  1.  Description of Business

  Telular Corporation (the Company), operates in a single line of business
  and designs, engineers, and manufactures component elements and complete
  telecommunications equipment assemblies and other complementary products
  and markets such products domestically and internationally by sale,
  lease, or license.

  2.  Summary of Significant Accounting Policies

  Consolidation

  The consolidated financial statements include the accounts of the Company
  and its wholly owned subsidiaries, Telular-Adcor Security Products and
  Telular International, Inc.  All significant intercompany balances and
  transactions have been eliminated.

  Revenue Recognition

  Product sales and associated costs are recognized at the time of shipment
  of products or performance of services.  Royalty revenue is calculated as
  a percentage of sales by the licensee and is recognized by the Company
  upon notification of sales by the licensee.

  Cash Equivalents

  Cash equivalents consist of highly liquid investments that have
  maturities of three months or less from the date of purchase.

  Financial Instruments

  Financial instruments that potentially subject the Company to significant
  concentrations of credit risk consist principally of trade accounts
  receivable.  Credit risks with respect to trade receivables are limited
  due to the diversity of customers comprising the Company's customer base.
  The Company generally receives irrevocable letters of credit that are
  confirmed by U.S. banks to reduce its credit risk.  The Company performs
  ongoing credit evaluations and charges uncollectible amounts to
  operations when they are determined to be uncollectible.

  Inventories

  Inventories are stated at the lower of first in, first out (FIFO) cost or
  market.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  2.  Summary of Significant Accounting Policies (continued)

  Earnings Per Share

  During the year ended September 30, 1998, the Company adopted Financial
  Accounting Standards Board (FASB) Statement of Financial Accounting
  Standard No. 128, Earnings Per Share (SFAS No. 128).  SFAS No. 128
  requires the calculation of basic earnings per share, which is computed
  by dividing net income by the weighted-average number of shares of common
  stock outstanding during the period and diluted earnings per common
  share, which is computed using the weighted-average number of shares of
  common stock, common stock equivalents, and any other dilutive
  securities.  Adoption of the new statement did not have a material impact
  on the earnings per share amounts presently reported in the financial
  statements.

  Comprehensive Income

  In June 1997, the FASB issued Statement of Financial Accounting Standard
  No. 130, Reporting Comprehensive Income (SFAS No. 130), which is
  effective for years beginning after December 15, 1997.  This Statement
  requires that an enterprise (a) classify items of other comprehensive
  income by their nature in a financial statement and (b) display the
  accumulated balance of other comprehensive income separately from
  retained earnings and additional paid-in capital in the equity section of
  a statement of financial position. Management has not completed its
  review of SFAS No. 130, but anticipates that the adoption of this
  statement will not have a significant effect on the Company's financial
  disclosures.

  Segment Disclosures

  In June 1997, the FASB issued Statement of Financial Accounting Standard
  No. 131, Disclosures about Segments of an Enterprise and Related
  Information (SFAS No. 131), which is effective for years beginning after
  December 15, 1997.  SFAS No. 131 establishes standards for the way public
  business enterprises report information about operating segments in
  annual financial statements and requires that those enterprises report
  selected information about operating segments in interim financial
  reports.  It also establishes standards for related disclosures about
  products and services, geographic areas, and major customers.  The
  Company will adopt the new requirements retroactively in fiscal year
  1999.  Management has not completed its review of SFAS No. 131, but
  anticipates that the adoption of this statement will not have a
  significant effect on the Company's financial disclosures.

  Reclassifications

  Certain amounts in the September 30, 1996 and 1997 financial statements
  have been reclassified to conform to the September 30, 1998 presentation.
<PAGE>

                              Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  2.  Summary of Significant Accounting Policies (continued)

  Property and Equipment

  Property and equipment are stated at cost.  Depreciation and amortization
  are computed using straight-line and accelerated methods for financial
  reporting purposes.

  Investments

  Management determines the appropriate classification of equity securities
  as of each balance sheet date.  Available-for-sale securities are carried
  at fair value, with the unrealized gains and losses reported in the a
  separate component of stockholders' equity.  Interest, dividends, and
  realized gains and losses on securities classified as available-for-sale
  are included in income.

  Income Taxes

  The Company accounts for income taxes in accordance with FASB Statement
  of Financial Accounting Standard No. 109, Accounting For Income Taxes
  (SFAS No. 109), which requires that the liability method be used in
  accounting for income taxes.  Under SFAS No. 109, deferred tax assets and
  liabilities are determined based on differences between financial
  reporting and tax basis of assets and liabilities and are measured using
  the enacted tax rates and laws in effect at the date of the financial
  statements.

  Intangible Assets

  Intangible assets consist primarily of license and technology agreements,
  which are being amortized over the lives of the related agreements using
  the straight-line method.

  Excess of Cost Over Fair Value of Net Assets Acquired

  The excess of cost over fair value of net assets acquired (goodwill) is
  amortized based on the straight-line method over ten years (See Note 5
  and 6).

  Use of Estimates

  The preparation of financial statements in conformity with generally
  accepted accounting principles requires management to make estimates and
  assumptions that effect the amounts reported in the financial statements
  and accompanying notes.  Actual results could differ from those
  estimates.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  2.  Summary of Significant Accounting Policies (continued)

  Deferred Financing Costs

  During the year ended September 30, 1996, financing costs incurred to
  issue the convertible debentures, totaling $515, were capitalized and
  were amortized from the date of issuance to December 1996 (the date that
  the last of the debentures was converted).  During the year ended
  September 30, 1997, financing costs incurred related to the revolving
  line of credit were $348.  These costs are being amortized over 36 months
  using the straight-line method.  During the years ended September 30,
  1998, 1997 and 1996, total amortization of deferred financing costs were
  $116, $73 and $481, respectively.

  Stock-Based Compensation Expense

  The Company recognizes stock-based compensation expense using Accounting
  Principles Board Opinion No. 25 (APB No. 25), which is based on the
  excess of the fair value of the stock on the measurement date, which is
  the grant date for stock options, over the exercise price of options
  granted to employees.

  In October 1995, the FASB issued Statement of Financial Accounting
  Standard, Accounting for Stock-Based Compensation (SFAS No. 123).  SFAS
  No. 123 encourages companies to record compensation costs for stock
  options granted to employees on the date of grant based on the fair value
  of these options.  Alternatively, it allows companies to continue to
  measure compensation based on the difference between the option exercise
  price and the fair market value on the date of grant.  The Company has
  elected to continue measuring compensation under APB No. 25.

  Fair Value of Financial Instruments

  The carrying values reported in the statement of financial position for
  receivables, revolving line of credit, and accounts payable approximate
  their fair values at September 30, 1998 and 1997.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  3.  Inventories

<TABLE>
<CAPTION>

  Inventories consist of the following:
                                                          September 30
                                                         1998      1997
                                                      -------   -------
                     <S>                              <C>       <C>
                     Raw materials                    $ 6,709   $ 6,799
                     Finished goods                     5,488     3,155
                                                      -------   -------
                                                       12,197     9,954
                     Less:  Reserve for obsolesence       603       523
                                                      -------   -------
                                                     $ 11,594   $ 9,431
                                                     ========   =======
</TABLE>

  4.  Property and Equipment
<TABLE>
<CAPTION>

  Property and equipment consist of the following:
                                                          September 30
                                                         1998      1997
                                                      -------   -------
                     <S>                              <C>       <C>
                     Computer equipment               $ 2,590   $ 1,809
                     Shop equipment                     3,967     2,209
                     Office equipment                   1,076       636
                     Automobiles                           21        21
                     Leasehold improvements             1,466       907
                     Security equipment held for rent     333       328
                     Construction in progress             494       352
                                                      -------   -------
                                                        9,947     6,262
                     Less:  Accumulated depreciation    4,451     2,651
                                                      -------   -------
                                                      $ 5,496   $ 3,611
                                                      =======   =======
</TABLE>

  5.  Write-Down of Intangible Assets

  During the year ended September 30, 1996, the carrying value of goodwill
  was determined to be impaired based on the estimated undiscounted cash
  flow of the related businesses over the remaining life of the goodwill.
  Events relating to a change in management and the corresponding change in
  business direction and the restructuring plan (See Note 5) prompted the
  evaluation of these intangibles.  During the year ending September 30,
  1996, impairment charges of approximately $4,812 were included in
  restructuring and impairment charges.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  5.  Write-Down of Intangible Assets (continued)

  As part of the restructuring plan (See Note 13), the Company decided to
  discontinue the manufacturing and marketing of products under a certain
  license agreement.  As a result, during the year ended September 30,
  1996, the remaining unamortized asset of approximately $2,530 was written
  off and was included in restructuring and impairment charges.

  6.  Acquisitions

  On June 28, 1996, the Company entered into an agreement and acquired a
  33% interest in Wireless Domain Incorporated (WD), formerly Telepath
  Corporation, in exchange for $1,000 in cash and 350,000 shares of common
  stock of the Company valued at approximately $2,200.  During the year
  ended September 30, 1997, the Company increased its equity position in WD
  to 50% by purchasing an additional 17% of WD in exchange for $500 in cash
  and 150,000 shares of common stock of the Company valued at approximately
  $695.  On October 1, 1997, the Company acquired the remaining 50% of WD
  in exchange for 500,000 shares of common stock valued at $1,700.

  Prior to October 1, 1997, the investment in WD was accounted for under
  the equity method.  Since October 1, 1997, the operations of WD have been
  included in the consolidated financial statements.

  The total purchase price for WD of approximately $6,000 exceeds the fair
  value of the net assets acquired by $4,896.  The purchase price was
  allocated to the acquired assets based upon their estimated respective
  fair market values.

  The following pro forma results of operations assumes the acquisitions of
  WD occurred as of October 1, 1996, after giving effect to certain
  adjustments including amortization of goodwill and equity income recorded
  for the periods in which the Company owned less than 100% of WD.

                                 Twelve Months ended
                                 September 30, 1997
                                     (Unaudited)

  Total Revenue                         $ 48,968
  Loss applicable to common               (8,716)
  shares                                ---------
  Basic and diluted loss per               (0.28)
  common share                          =========
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  6.  Acquisitions (continued)

  Revenues would not change as a result of the acquisition as WD's revenues
  related entirely to amounts billed to the Company.  The pro forma
  financial information does not purport to be indicative of the results of
  operations that would have occurred had the transaction taken place at
  the beginning of the periods indicated or of future results of
  operations.

  7.  Investments

  On March 2, 1998, the Company received 300,000 shares of ORA Electronics,
  Inc., formerly Alliance Research Corporation, common stock, valued at
  $450, as part of a litigation settlement (See Note 20).  The investment
  is classified as available-for-sale and is included in other assets.  On
  September 30, 1998, the investment had a fair value of $525.  The Company
  recorded an unrealized gain of $75 at September 30, 1998.

  8.  Income Taxes

  At September 30, 1998, the Company has net operating loss carryforwards
  of approximately $85,616 for income tax purposes that begin expiring in
  2008.  Deferred income taxes reflect the net tax effects of temporary
  differences between the carrying amounts of assets and liabilities for
  financial reporting purposes and the amounts used for income tax
  purposes.

  Significant components of the Company's deferred tax assets are as
  follows:
<TABLE>
<CAPTION>
                                                    September 30
                                                   1998      1997
            <S>                                   <C>       <C>
            Deferred tax assets:
             Reserve for inventories              $ 234     $ 203
             Allowance for doubtful accounts         44       165
             Certain intangible assets            3,230     3,565
             Other                                  425       468
             Research and development tax credit    670       121
             Net operating loss carryforwards    33,219    28,816
                                                -------   -------
            Total deferred tax assets            37,882    33,338
            Valuation allowance                  37,882    33,338
                                                -------   -------
            Net deferred tax assets                 $ 0       $ 0
                                                =======   =======
</TABLE>

  The valuation allowance has increased by $4,544 during the year ended
  September 30, 1998, due principally to the increase in the net operating
  loss carryforwards in 1998.
  Based on the Internal Revenue Code and changes in the ownership of the
  Company, utilization of the net operating loss carryforwards may be
  subject to annual limitations.

  9.  Revolving Line of Credit

  On April 23, 1997, the Company entered into a Loan and Security Agreement
  with Sanwa Business Credit Corporation that, among other things, provides
  a revolving credit facility with a loan limit of $20,000 (the Loan).
  Borrowings under the Loan are limited to certain percentages and amounts
  of accounts receivable and inventories.  The Loan requires the Company to
  maintain a $4,000 compensating balance; beginning with the second fiscal
  quarter of 1998, this compensating balance requirement may be waived
  based upon attainment of specified tangible net worth levels.  The
  Company had approximately $6,100 and $11,400, in available borrowings
  under this agreement at September 30, 1998 and September 30, 1997,
  respectively.  The Loan is secured by substantially all the assets of the
  Company.  Under the Loan and Security Agreement, the Company is
  restricted from making certain dividend payments and is required to
  comply with certain affirmative and negative covenants.  The Loan matures
  on April 23, 2000.  At the Company's election, the Loan carries interest
  at the bank's prime rate plus 1.0% or the Eurodollar rate (Libor) plus
  3.00%.  The Company has not borrowed any amounts pursuant to the loan as
  of September 30, 1998.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  10.  Convertible Debentures

  On December 11, 1995, the Company issued $18,000 in convertible
  debentures (the Debentures) at 4% per annum.  The Debentures were issued
  under the provisions of Regulation S as promulgated under the United
  States Securities Act of 1933, as amended.  Holders of the Debentures
  were entitled, at their option any time after issuance until December 10,
  1997, to convert principal and interest accrued thereon, in whole or in
  part, into shares of common stock using defined conversion formulas based
  on Nasdaq closing bids for the Company's common stock.  The Company is
  entitled, at its option any time commencing one year after issuance (and
  under certain circumstances prior to that date) through maturity, to
  require the holders to convert the principal and accrued interest into
  shares of common stock of the Company using defined conversion formulas
  based on Nasdaq closing bids for the Company's common stock.  During the
  years ended September 30, 1997 and 1996, all convertible debentures and
  accrued interest totaling $1,555 and $16,665 were converted into 378,200
  and 6,655,315 shares of common stock, respectively.

  11.  Redeemable Preferred Stock

  During the year ending September 30, 1997, the Company issued 20,000
  shares (10,000 shares on April 16, 1997 and 10,000 shares on June 6,
  1997) of Series A Convertible Preferred Stock (the Preferred Stock) for
  $18,800 which is net of issuance cost of $1,200.  The Preferred Stock
  automatically converts to Common Stock on April 16, 1999, or October 16,
  1999, depending on the conversion price and includes the equivalent of a
  5% annual stock dividend ($895 and $385 at September 30, 1998 and 1997,
  respectively).  Holders of the Preferred Stock are entitled, at their
  option, subject to trading volume and other restrictions, to convert
  Preferred Stock into shares of Common Stock using defined conversion
  formulas based on the Nasdaq closing bid prices for the Company's Common
  Stock.  In addition, the holders have the option to redeem the Preferred
  Stock upon the occurrence of a:  (i) consolidation or merger with another
  company; (ii) sale or transfer of substantially all assets; or (iii) 50%
  change in ownership.  The redemption price upon holder redemption is the
  greater of $1,250 per share or the cash equivalent of the defined
  conversion formula on the date redemption.  The Company is entitled to
  require the holders to convert the Preferred Stock and accrued dividends
  into shares of common stock of the Company using a defined conversion
  formula based upon the Nasdaq closing bid prices for the Company's common
  stock.  In addition, the Company has the right to redeem the Preferred
  Stock after April 15, 1999, for $1,200 per share plus 120% of the accrued
  dividends.  Holders of the Preferred Stock are not entitled to vote on
  matters submitted for vote to the stockholders of the Company.

  The Preferred Stock reflects a beneficial conversion feature that allows
  holders to convert the security to common stock of the Company at a
  discount.  The amount of the discount is determined using Nasdaq closing
  bid prices for the Company's common stock.  During year ending September
  30, 1997, the Company recorded $2,200 of amortization of preferred stock
  beneficial conversion discount.  The offset entry to amortization of
  preferred stock beneficial conversion discount increased redeemable
  preferred stock by $2,200.  This amount will accrete to the Company's
  common stock and additional paid-in capital accounts as shares of
  redeemable preferred stock are converted into shares of common stock of
  the Company.  During the year ended September 30, 1998, 3,494 shares of
  preferred stock were converted into 1,581,170 shares of common stock.


  12.  Related Party Transactions

  Pursuant to the terms of a 1993 Stock Purchase Agreement, the Company
  issued and sold 3,824,240 shares of common stock to Motorola, Inc.
  (Motorola) in exchange for cash proceeds of $11,000, access to specified
  services of Motorola, and certain transceiver supply and pricing
  arrangements.  Among other things, the Stock Purchase Agreement contains
  restrictions on certain actions that would adversely impair the rights of
  Motorola and on the sale of additional Company stock to strategic
  investors, as defined.  In connection with this transaction, the patent
  cross-license agreement was amended to revise the royalty due to Motorola
  for units leased, used, or sold and to reduce the purchase price of
  certain products purchased by the Company from Motorola.

  In addition, the Company has an agreement with Motorola, whereby the
  Company will provide engineering services, at their typical rates, over a
  three-year period ending November 10, 1998.  For the years ended
  September 30, 1998, 1997 and 1996, payments received under this agreement
  were approximately $1,900, $1,850 and $1,000, respectively.  The Company
  had obtained a volume purchase commitment, as defined, from Motorola over
  a three-year period commencing January 1, 1996.  No sales were made to
  Motorola or its affiliates pursuant to this purchase commitment during
  1998.  Net sales made to Motorola and its affiliates pursuant to this
  purchase commitment were $21,190 and $6,000 during the fiscal years ended
  September 30, 1997 and 1996, respectively.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  12.  Related Party Transactions (continued)

  Pursuant to the terms of the patent license agreement with Motorola, the
  Company receives a royalty for each unit leased, used, or sold by
  Motorola.  The agreement will remain in effect for the life of the
  patents by country, unless either party in accordance with the terms of
  the agreement terminates it.  Pursuant to a technology transfer agreement
  with DNIC Brokerage Co. (DNIC), the Company's predecessor, the Company
  remits the first $250 of royalties received annually to DNIC.  For the
  years ended September 30, 1998, 1997, and 1996, royalty income earned by
  the Company pursuant to the Motorola agreement was approximately $350,
  $496, and $644, respectively.

  Accounts receivable from Motorola were $1,268 and $4,670 as of September
  30, 1998 and 1997, respectively.

  Purchases from Motorola totaled approximately $8,020, $9,557, and $12,983
  for the years ended September 30, 1998, 1997, and 1996, respectively.
  Purchases from Wireless Domain totaled $2,709 and $675 for the years
  ended September 30, 1997 and 1996, respectively.

  Accounts payable to Motorola, were approximately $1,185 and $3,449 for
  the years ended September 30, 1998 and 1997, respectively.  A payable to
  Wireless Domain did not exist as of September 30, 1998.  Accounts payable
  to Wireless Domain was approximately $191 on September 30, 1997.

  13.  Restructuring and Impairment Costs

  On January 22, 1996, the Company announced a restructuring program that
  was completed during the third quarter of fiscal year 1996.  The
  difficulty in predicting demand for the Company's products, due in part
  to immature foreign markets, underscored the importance of properly
  aligning costs and expenses to attainable levels of revenue.
  Manufacturing and engineering consolidation, outsourcing, and the
  elimination of noncore product lines were the focus of the restructuring.
  The Company's Puerto Rico and Illinois manufacturing operations were
  phased out during the second fiscal quarter of fiscal year 1996, and
  production was consolidated at the Company's Atlanta, Georgia, facility.
  The restructuring program has reduced general, administrative, and
  manufacturing costs Company-wide.

  Restructuring charges related to the activities discussed above were
  approximately $6,740 and consist of intangible assets, inventory, and
  fixed asset write-offs as well as severance payments to employees
  separated from the Company.  Restructuring payments were approximately
  $675 in fiscal year 1996.  These charges are included in restructuring
  and impairment charges.  See Note 5 for discussion of impairment of
  intangible assets.

  14.  Leases

  The Company and its subsidiaries occupy certain facilities under lease
  agreements and lease certain equipment under various agreements expiring
  through December 31, 2003.  Rent expense for the years ended
  September 30, 1998, 1997, and 1996 was approximately $806, $596, and
  $595, respectively.  Future minimum obligations under noncancelable
  operating leases are as follow:
<TABLE>
                       <S>                    <C>
                       1999                   $ 829
                       2000                     788
                       2001                     747
                       2002                     748
                       2003                     572
                       Thereafter             1,860
                                            -------
                                            $ 5,544
                                            =======
</TABLE>
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  15.  Capital Stock and Stock Options

  The Company has a Stock Incentive Plan (the Plan).  Under the Plan,
  options to purchase shares of common stock may be granted to all
  employees and employed directors.  Outside of the Plan, the Company has
  entered into stock option agreements (the Non-Qualified Stock Option
  Agreements) with officers and key employees of the Company.

  Under the Non-Qualified Stock Option Agreements, certain employees were
  granted options before the Company's 1994 initial public offering.  These
  options were granted at exercise prices, which range from $0.93 to $23.00
  per share, were determined by the Board of Directors, and represented
  estimated fair market values of the Company's common stock at the grant
  date.  These options are fully vested and, if not exercised or
  terminated, will terminate on the fifth anniversary of the vesting date.

  Under the Plan, certain officers and key employees have been granted
  stock options.  These options vest over two years, as defined in the
  agreement.  Upon termination of employment for any reason other than
  death or termination without cause, any options that have not vested
  shall terminate.  All options, if not exercised or terminated, will
  terminate on the tenth anniversary of the date of grant.  The executive
  may purchase at any time less than the full number of shares for which
  the option is then exercisable.

  Non-Qualified Stock Options have been granted to officers and all
  employees of the Company pursuant to the Plan.  These options will vest
  either immediately or over a period of up to seven years, as defined in
  the agreement.  All options, if not exercised or terminated, will
  terminate either on the sixth or the tenth anniversary of the date of
  grant as defined in the agreement.

  Non-Qualified Stock Options have been granted to the independent
  directors of the Company in lieu of compensation as directors and members
  of committees of the Board of Directors which, if not exercised or
  terminated, will terminate on the sixth anniversary of the date of grant.

  In April 1996, the Company reset the exercise price on the options
  granted to officers, all employees, and directors pursuant to the Plan.
  The revised exercise price represented the fair value of the Company's
  stock as of April 17, 1996, and, accordingly, no compensation expense was
  recognized.  In October 1997, the Company once again reset the exercise
  price for all outstanding options.  The revised exercise price
  represented the fair value of the Company's stock as of October 28, 1997,
  and, accordingly, no compensation expense was recognized.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  15.  Capital Stock and Stock Options (continued)

  Stock option activity, including Non-Qualified Stock Options, activity
  under the Plan, and options granted to independent directors, is as
  follows (in thousands, except exercise prices):
<TABLE>
<CAPTION>

                           1996              1997                 1998
                     -----------------  -----------------  -------------------
                              Weighted-          Weighted-           Weighted-
                               Average            Average             Average
                              Exercise           Exercise            Exercise
                     Options    Price   Options    Price    Options    Price
                     -------  --------  -------  ---------  -------  ---------
  <S>                  <C>      <C>       <C>       <C>       <C>       <C>
  Outstanding at
   beginning of year   1,734    $ 6.58    1,858     $ 5.31    1,778     $ 4.56
  Granted              1,103      4.84      478       5.02    1,543       2.90
  Exercised             (361)     1.23      (47)      5.73     (160)       .93
  Canceled              (618)     8.65     (511)      7.72     (410)      4.40
                     -------  --------  -------  ---------  -------  ---------
  Outstanding at
   end of year         1,858    $ 5.31    1,778     $ 4.56    2,750     $ 3.14
                     =======  ========  =======  =========  =======  =========
</TABLE>

  Exercisable at
   end of year             690                779                 866
  Exercise price range   $ 0.93 - $ 18.00   $ 0.93 - $ 23.00    $ 0.93 - 23.00

  At September 30, 1998, 2,476 of the 2,750 options outstanding had an
  exercise price between $1.91 and $3.06 per share.  The options had a
  weighted average remaining contractual life of 6.5 years.

  A summary of the weighted-average fair value of options granted during
  1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                         1998                    1997

                                  Weighted-   Weighted-   Weighted-   Weighted-
                                   Average     Average     Average     Average
                                  Exercise    Fair Value  Exercise    Fair Value
                                    Price     of Options    Price     of Options
                                 -----------------------------------------------
  <S>                               <C>           <C>       <C>          <C>
  Options with exercise
   prices equal to market price     $ 2.90        $ .68     $ 5.19       $ 2.12
  Options with exercise
   prices less than market price         0            0       4.91         3.86
  Options with exercise
   prices exceeding market price         0            0       5.56         3.73
</TABLE>

  At September 30, 1998, the Company has reserved 3,000,000 shares of the
  Company's common stock for issuance in connection with the Plan.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  15.  Capital Stock and Stock Options (continued)

  Pro forma information regarding net income and earnings per share is
  required by Statement 123, which also requires that the information be
  determined as if the Company had accounted for its employee stock options
  granted subsequent to October 1, 1995, under the fair value method of
  that Statement.  The fair value for these options was estimated at the
  date of grant using a Black-Scholes option pricing model with the
  following weighted-average assumptions for 1998, 1997 and 1996, risk-free
  interest rates of 6.0%, 6.5% and 6.3%, respectively, volatility factor of
  the expected market price of the Company's common stock of 35%; a
  weighted-average expected life of the options of four years; and no
  dividend yield.

  The Black-Scholes option valuation model was developed for use in
  estimating the fair value of traded options which have no vesting
  restrictions and are fully transferable.  In addition, option valuation
  models require the input of highly subjective assumptions including the
  expected stock price volatility.  Because the Company's employee stock
  options have characteristics significantly different from those of traded
  options, and because changes in the subjective input assumptions can
  materially affect the fair value estimate, in management's option, the
  existing models do not necessarily provide a reliable single measure of
  the fair value of its employee stock options.

  For purposes of pro forma disclosures, the estimated fair value of the
  options is amortized to expense over the options' vesting period.  The
  Company's pro forma information follows:
<TABLE>
<CAPTION>

                                          1998       1997        1996
                                    ----------------------------------
    <S>                              <C>         <C>        <C>
    Pro forma net loss applicable
     to common shares                $ (11,655)  $ (8,435)  $ (27,178)

    Pro forma basic and diluted
     loss per common share                (.35)      (.27)       (.98)
</TABLE>

  16.  Research and Development Expenses

  Research and development expenses for the years ended September 30, 1998,
  1997, and 1996, were approximately $7,629, $5,698, and $4,271,
  respectively.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  17.  Major Customers

  For the year ended September 30, 1998, the Company derived approximately
  $4,266 (11%) and $7,369 (19%) of its total revenues from two customers,
  Qualcomm, Inc. and Guinea Sotelgui S.A., respectively.  As of September
  30, 1998, $160 was included in accounts receivable from Qualcomm, Inc and
  none for Guinea Sotelgui S.A.  For the years ended September 30, 1997 and
  1996, the Company derived approximately $21,742 (44%) and $8,600 (31%) of
  its total revenues from one customer, Motorola, of which approximately
  $4,690 and $4,100 was included in accounts receivable at September 30,
  1997 and 1996, respectively.

  18.  Export Sales

  Export sales were approximately $30,010, $39,272, and $12,872 for the
  years ended September 30, 1998, 1997, and 1996, respectively.  Export
  sales were primarily to the Asian and European, Middle Eastern, and
  African (EMEA) regions during the years ended September 30, 1998 and
  1997, and to the Caribbean and Latin American (CALA) and EMEA regions
  during the year ended September 30, 1996.

  19.  Contingencies

  The Company is involved in legal proceedings, which arise in the ordinary
  course of its business.  While any litigation contains an element of
  uncertainty, based upon the opinion of the Company's counsel, management
  believes that the outcome of such proceedings will not have a material
  adverse effect on the Company's consolidated results of operations.

  20.  Litigation Settlements

  On March 2, 1998, the Company reached settlement in its patent
  infringement case against ORA Electronics, Inc. and received the
  following from ORA Electronics, Inc.: $500 in cash, a $1,000 promissory
  note, 300,000 shares of ORA Electronics, Inc. common stock (ORA stock)
  with a fair market value of $450 (See Note 7) and the right to receive
  additional shares of ORA stock to ensure the fair market value received
  in stock is equivalent to $1,500 on February 1, 2000.  The Company
  recorded royalty and royalty settlement revenue of approximately $1,176
  during fiscal year 1998 which is equivalent to the fair market value of
  the cash and assets received on March 2, 1998, net of legal fees.

  On September 8, 1998, the Company reached settlement through arbitration
  in its contract termination case with Global Tel Link Corporation.  The
  arbitrator awarded Global Tel Link Corporation $618 in damages which is
  included in other expenses as of September 30, 1998.
<PAGE>

                             Telular Corporation
           Notes to Consolidated Financial Statements (continued)
                      (In Thousands, Except Share Data)

  21.Employee Benefit Plan

  The Company sponsors a defined contribution plan under section 401(k) of
  the Internal Revenue Code.  The plan covers substantially all employees
  of the Company.  The Company may match employee contributions on a
  discretionary basis.  There were no amounts charged against operations
  related to the Company's match for the years ended September 30, 1998,
  1997, and 1996.

  22.  Quarterly Results of Operations (Unaudited)

  The following is a summary of the quarterly results of operations for the
  years ended September 30, 1998, 1997, and 1996 (in thousand, except share
  data).
<TABLE>
<CAPTION>

                                         Three months ended
                             December 31  March 31  June 30  September 30
                             --------------------------------------------
  <S>                          <C>        <C>       <C>       <C>
  Fiscal year ended 1998
  Total revenue                $ 12,687   $ 11,054  $ 8,657    $ 8,038
  Gross profit                    2,774      3,359    1,982      1,750
  Net loss                       (2,041)    (1,812)  (2,548)    (4,003)
  Basic and diluted loss   
   per common share                (.07)      (.06)    (.09)      (.12)

  Fiscal year ended 1997
  Total revenue                $ 18,380   $ 11,600  $ 5,444   $ 13,544
  Gross profit                    4,583      3,020      694      2,790
  Net profit (loss)                 740       (732)  (3,973)    (1,337)
  Basic and diluted loss     
   per common share                 .02       (.02)    (.17)      (.05)

  Fiscal year ended 1996
  Total revenue                 $ 4,173    $ 4,740  $ 4,906   $ 14,098
  Gross profit (loss)               431     (1,827)   1,334      4,073
  Net profit (loss)              (5,230)   (17,399)  (4,495)       531
  Basic and diluted loss   
   per common share                (.20)      (.66)    (.12)       .02
</TABLE>

  The accumulation  of fiscal  year 1996  quarterly net  (loss) income  per
  common share does not equal  the net loss per  common share for the  year
  ended September 30,  1996, due to  the large number  of shares issued  in
  conjunction with the conversion of debentures during the second and third
  quarters of fiscal year 1996.


  Item 9.  Changes in and Disagreements With Accountants on Accounting  and
  Financial Disclosure

       Not Applicable.
<PAGE>


                                     PART III


  Item 10.  Directors and Executive Officers of the Registrant

       Pursuant to General Instruction G(3), reference is made to the
  information contained under the caption Directors of the Company in the
  Company's definitive proxy statement for its 1998 Annual Meeting of
  Shareholders filed with the Securities and Exchange Commission on or
  before December 29, 1998, which is incorporated herein.

       The executive officers of the Company and their ages as of November
  20, 1998 are as follows:

          Name           Age  Position

   Kenneth E. Millard    51   Chief Executive Officer and President
   Robert C. Montgomery  57   Executive Vice President and
                              Chief Operating Officer
   Daniel D. Giacopelli  40   Executive Vice President and
                              Chief Technology Officer
   Jeffrey L. Herrmann   33   Senior Vice President,
                              Chief Financial Officer, Secretary
   S.W.R. (Sandy) Moore. 55   Senior Vice President,
                              Strategic Alliances & OEM Sales

       Kenneth E. Millard has served as a director, President and Chief
  Executive Officer of the Company since April 1996.  Mr. Millard served as
  President and Chief Operating Officer of Oncor Communications, based in
  Bethesda, Maryland from 1992 to 1996.  He worked for Ameritech from 1982
  to 1992 where he served as President and Chief Executive Officer of
  Michigan Bell Telephone Company from 1989 to 1992.  Prior to 1989, he
  held the positions of Senior Vice-President of Corporate Strategy for
  three years and Senior Vice-President and General Counsel of Ameritech
  for four years.  From 1972 to 1982, Mr. Millard worked for AT&T and
  Wisconsin Bell as an attorney.

       Robert C. Montgomery has served as director since October 28, 1997.
  He has been the Company's Executive Vice President and Chief Operating
  Officer since 1996.  Prior to that, Mr. Montgomery was President (and
  founder) of Telular-Adcor Security Products, Inc., a company that was
  acquired by the Company in 1993.  Previously, Mr. Montgomery was a
  partner at McKinsey & Company.  He was employed by McKinsey & Company for
  twelve years.

       Daniel  D.  Giacopelli  has  served  as  director,  Executive   Vice
  President and Chief Technology Officer of  the Company since October  28,
  1997.   Mr. Giacopelli  founded and  was  President and  Chief  Executive
  Officer of Wireless Domain, Incorporated from September 1995 to  November
  1997.  Prior to that time, Mr. Giacopelli was Director of Engineering  of
  the Wireless Group of Telephonics Corporation  from 1987 to 1995.   Prior
  to 1987, Mr.  Giacopelli was President  and CEO  of Valinor  Electronics,
  Inc.
<PAGE>

       Jeffrey L. Herrmann has served as Senior Vice President, CFO and
  Secretary of the Company and Secretary of the Company's board of
  directors since July 22, 1997.  Mr. Herrmann had previously been
  Corporate Controller of the Company since April, 1997.  Prior to that Mr.
  Herrmann held financial management positions with Bell & Howell Company
  (1994-1997) and R.R. Donnelley & Sons Company (1992-1994).  Mr. Herrmann
  began his career with Arthur Andersen & Company in 1987.

       S.W.R. (Sandy) Moore has served as Senior Vice President, Strategic
  Alliances & OEM Sales since December 1996.  Mr. Moore served from 1991 to
  1996 as President and CEO of Spectrix Corporation based in Deerfield,
  Illinois.  He worked for NovAtel Communications from 1988 to 1990 where
  he served as President and COO during 1990.  Prior to 1988 Mr. Moore
  spent 16 years with Northern Telecom in Senior Marketing and General
  Management positions.


  Item 11.  Executive Compensation

       Pursuant to  General  Instruction G(3),  reference  is made  to  the
  information contained  under the  caption Executive  Compensation in  the
  Company's definitive  proxy  statement for  its  1998 Annual  Meeting  of
  Shareholders filed  with the  Securities and  Exchange Commission  on  or
  before December 29, 1998, which is incorporated herein.

  Item 12.  Security Ownership of Certain Beneficial Owners and Management

       Pursuant to  General  Instruction G(3),  reference  is made  to  the
  information contained  under the  caption Security  Ownership of  Certain
  Beneficial Owners  and  Management  in  the  Company's  definitive  proxy
  statement for  its 1998  Annual Meeting  of Shareholders  filed with  the
  Securities and Exchange Commission on or before December 29, 1998,  which
  is incorporated herein.

  Item 13.  Certain Relationships and Related Transactions

       Pursuant to  General  Instruction G(3),  reference  is made  to  the
  information contained under the caption Certain Relationships and Related
  Transactions in the  Company's definitive  proxy statement  for its  1998
  Annual Meeting of  Shareholders filed  with the  Securities and  Exchange
  Commission on or before December 29, 1998, which is incorporated herein.
<PAGE>

                                   Part IV


  Item 14.  Exhibits,  Financial Statement Schedules,  and Reports on  Form
            8-K


  (a)  1.   The following  financial statements  are included  in Part  II,
            Item 8 of this Form 10-K.

            Report of Independent Auditors

            Consolidated Balance Sheets as of September 30, 1998 and 1997

            Consolidated Statements  of  Operations  for  the  years  ended
            September 30, 1998, 1997 and 1996

            Consolidated Statements of Stockholders'  Equity for the  years
            ended September 30, 1998, 1997 and 1996

            Consolidated Statements  of  Cash  Flows for  the  years  ended
            September 30, 1998, 1997 and 1996

            Notes to Consolidated Financial Statements

       2.   The following schedule for the years ended September 30,  1998,
            1997 and 1996.

            Schedule VIII  Valuation and Qualifying Accounts

            All other schedules are omitted because they are not applicable
            or the required information is shown in the financial statements
            or notes thereto.

       3.   Exhibits.
<TABLE>
<CAPTION>

       Number Description                      Reference
       ------ ----------------------------     -----------------------------
       <S>   <S>                               <S>
       3.1   Certificate of Incorporation      Filed as Exhibit 3.1 to 
                                               Registration Statement
                                               No. 33-72096 (the
                                               Registration Statement)

       3.2   Amendment No. 1 to Certificate    Filed as Exhibit 3.2
             of Incorporation                  to the Registration Statement

       3.3   Amendment No. 2 to Certificate    Filed as Exhibit 3.3 to the
             of Incorporation                  Registration Statement

       3.4   By-Laws                           Filed as Exhibit 3.4 to the
                                               Registration Statement

       4.1   Loan Agreement with LaSalle       Filed as Exhibit 4.1
             National Bank and Amendment       to  Form 10-K filed December
             thereto                           27, 1995

       4.2   Debenture Agreements dated        Filed as Exhibit 4.2 
             December 11, 1995                 to Form 10-K filed
                                               December 27, 1995
<PAGE>

       4.3   Certificate of Designations,      Filed as Exhibit 99.2
             Preferences, and Rights of        Form 8-K filed
             Series A Convertible Preferred    April 25, 1997
             Stock

       4.4   Loan and Security Agreement with  Filed as Exhibit 4.2 to
             Sanwa Business Credit Corporation Form 10-Q filed August 14, 1997

      10.1   Consulting Agreement with         Filed as Exhibit 10.1
             William L. De Nicolo              to the Registration Statement

      10.2   Employment Agreement with         Filed as Exhibit 10.1 to Form 10-Q
             Kenneth E. Millard                filed August 14, 1996

      10.3   Stock Option Agreement with       Filed as Exhibit 10.2 to Form 10-Q
             Kenneth E. Millard                filed August 14, 1996

      10.4   Stock Purchase Agreement By       Filed as Exhibit
             and Among Telular Corporation     10.3 to Form 10-Q
             and TelePath Corporation (which   filed August 14, 1996
             had changed its name to Wireless
             Domain, Incorporated)

      10.5   Appointment of Larry J. Ford      Filed as Exhibit 10.2
                                               to Form 10-Q filed
                                               May 1, 1995

      10.6   Option Agreement with Motorola    Filed as Exhibit 10.6
             dated November 10, 1995           to Form  10-K filed
                                               December 26, 1996(1)

      10.7   Stock Purchase Agreement          Filed as Exhibit 10.11
             between Motorola, Inc. and        to the Registration Statement
             Telular Corporation dated 
             September 20, 1993

      10.8   Patent Cross License Agreement    Filed as Exhibit 10.12
             between Motorola, Inc. and the    to the Registration
             Company, dated March 23, 1990     Statement(1)
             and Amendments No. 1, 2 and
             3 thereto 

      10.9   Exclusive Distribution and        Filed as Exhibit 10.14
             Trademark License Agreement       the Registration
             between Telular Canada Inc.       Statement(1)
             and the Company, dated April 1,
             1989, and Amendments thereto

     10.10   Amended and Restated Shareholders Filed as Exhibit 10.15
             Agreement dated November 2, 1993  to the Registration
                                               Statement(1)

     10.11   Amendment No. 1 to Amended and    Filed as Exhibit 10.24
             Restated Shareholders             the Registration
             Agreement, dated January 24, 1994 Statement

     10.12   Amendment No. 2 to Amended and    Filed as Exhibit 10.5
             Restated Shareholders Agreement,  to the Form 10-Q filed
             dated June 29, 1995               July 28, 1995

     10.13   Amended and Restated Registration Filed as Exhibit 10.16
             Rights Agreement dated November   to the Registration
             2, 1993                           Statement
<PAGE>

     10.14   Amendment No. 1 to Amended and    Filed as Exhibit 10.25
             Restated Registration Rights      to the Registration
             Agreement, dated January 24,      Statement
             1994

     10.15   Amended and Restated Employee     Filed as Exhibit 10.17
             Stock Option Plan                 to Form  10-K filed
                                               December 26, 1996

     10.16   Stock Option Grant to             Filed as Exhibit 10.7
             Independent Directors             to  Form 10-Q filed
                                               July 28, 1995

     10.17   Securities Purchase Agreement     Filed as Exhibit 99.1 to
             dated April 16, 1997, by and      Form 8-K filed
             between Telular Corporation and   April 25, 1997
             purchasers of the Series A
             Convertible Preferred Stock

     10.18   Registration Rights Agreement     Filed as Exhibit 99.3 to
             dated April 16, 1997, by and      Form 8-K filed
             between Telular Corporation and   April 25, 1997 
             purchasers of the Series A
             Convertible Preferred Stock

     10.19   Securities Purchase Agreement     Filed as Exhibit 99.3 to
             dated June 6, 1997, by and        Registration Statement on
             between Telular Corporation and   Form S-3, Registration
             purchasers of the Series A        No. 333-27915, as amended 
             Convertible Preferred Stock       by Amendment No. 1 filed
                                               June 13, 1997, and further
                                               Amended by Amendment
                                               No. 2 filed July 8, 1997
                                               (Form S-3)

     10.20   Registration Rights Agreement     Filed as Exhibit 99.4 to
             dated June 6, 1997, by and        Form S-3
             between Telular Corporation and
             purchasers of the Series A
             Convertible Preferred Stock

     10.21   Agreement and Plan of Merger by   Filed as Exhibit 10.21
             and among Wireless Domain         to Form  10-K filed
             Incorporated (formerly TelePath), December 19, 1998
             Telular-WD (a wholly-owned
             subsidiary of Telular) and
             certain stockholder of Wireless
             Domain Incorporated

     10.22   Employment Agreement with Daniel  Filed as Exhibit 10.22
             D. Giacopelli                     to Form 10-Q filed
                                               February 13, 1998
                                                    

     10.23   Employment Agreement with Robert  Filed as Exhibit 10.23
             C. Montgomery                     to Form 10-Q filed
                                               February 13, 1998

        11   Statement regarding computation   Filed herewith
             of per share earnings

        21   Subsidiaries of registrant        Filed herewith
<PAGE>

        27   Financial data schedule           Filed herewith

        99   Cautionary Statements Pursuant    Filed herewith
             to the Securities Litigation Act
             of 1995
</TABLE>

       (1)  Confidential  treatment  granted   with  respect  to   redacted
            portions of documents.


  (b)  Reports on Form 8-K

       The Company did  not file any  report on Form  8-K during the  three
       months ended September 30, 1998:


  (c)  See Exhibit Index and  Exhibits attached to  this report and  listed
       under item 14(a)(3).

  (d)  Financial Statements  Schedules required  by  this Item  are  listed
       under Item 14(a)(2).
<PAGE>

                                 SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) 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.

                                      Telular Corporation

  Date:  December 18, 1998            By: /s/KENNETH E. MILLARD
                                      Kenneth E. Millard
                                      President, Chief Executive
                                      Officer and Director

       Pursuant to the requirements of the Securities and Exchange Act of
  1934, this report has been signed by the following persons on behalf of
  the registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

      Signature               Title                          Date
  <S>                         <C>                            <C>
  /s/WILLIAM L. DE NICOLO     Chairman of the Board          December 18, 1998
  -----------------------
  William L. De Nicolo


  /s/KENNETH E. MILLARD       President, Chief Executive     December 18, 1998
  -----------------------     Officer and Director
   Kenneth E. Millard         


  /s/ROBERT C. MONTGOMERY     Chief Operating Officer,       December 18, 1998
  -----------------------     Executive Vice President and
   Robert C. Montgomery       Director
  

  /s/DANIEL D. GIACOPELLI     Chief Technology Officer,      December 18, 1998
  -----------------------     Executive Vice President and
   Daniel D. Giacopelli       Director


  /s/ JEFFREY L. HERRMANN     Chief Financial Officer,       December 18, 1998
  -----------------------     Secretary and Senior Vice
   Jeffrey L. Herrmann        President


  /s/ S.W.R. (SANDY) MOORE    Senior Vice President,         December 18, 1998
  ------------------------    Strategic Alliances and
   S.W.R. (Sandy) Moore       OEM Sales


  /s/JOHN E. BERNDT           Director                       December 18, 1998
  -----------------------
   John E. Berndt


  /s/LARRY J. FORD            Director                       December 18, 1998
  -----------------------
   Larry J. Ford


  /s/RICHARD D. HANING        Director                       December 18, 1998
  -----------------------
   Richard D. Haning


  /s/MARK R. WARNER           Director                       December 18, 1998
  -----------------------
   Mark R. Warner
</TABLE>
<PAGE>
<TABLE>

  Item 14(a) 2.  Schedule VIII - Valuation and Qualifing Accounts


                                                     TELULAR CORPORATION

                                               VALUATION AND QUALIFYING ACCOUNTS
                                                       (in thousands)

                                                               Charged
                                     Balance at  Charged to    to other                 Balance
                                     Beginning   Costs and     accounts- Deductions     at end
  Description                        of Period   Expenses      Describe   Describe     of period
  -------------------------------    ---------  ---------     --------- ---------     ---------
  <S>                               <C>         <C>           <C>       <C>           <C>
  Period Ended September 30, 1998

  Accumulated Amortization of
  Intangible Assets                 $      671  $     959     $       0 $       0     $   1,630
  Valuation Allowance of Deferred                                                        
  Tax Asset                             33,338      4,544 (3)         0         0        37,882
  Allowance for Doubtful Accounts          426          0             0      (314) (4)      112
  Inventory Reserve                        523      1,819             0    (1,739) (5)      603

  Period Ended September 30, 1997

  Accumulated Amortization of
  Intangible Assets                 $      140  $     531     $       0 $       0     $     671
  Valuation Allowance of Deferred                                                        
  Tax Asset                             32,288      1,050 (3)         0         0        33,338
  Allowance for Doubtful Accounts          900          0             0      (474) (4)      426
  Inventory Reserve                      1,199       (259)            0      (417) (5)      523

  Period Ended September 30, 1996

  Accumulated Amortization of
  Intangible Assets                 $    1,909    $ 7,926 (1) $       0  $ (9,695) (2)      140
  Valuation Allowance of Deferred                                                        
  Tax Asset                             21,888     10,400 (3)         0         0        32,288
  Allowance for Doubtful Accounts          218        974             0      (292) (4)      900
  Inventory Reserve                      1,312      4,304             0    (4,417) (5)    1,199

  Period Ended September 30, 1995

  Accumulated Amortization of
  Intangible Assets                 $      952    $   956     $       0  $      0         1,908
  Valuation Allowance of Deferred                                                        
  Tax Asset                             12,096      9,792 (3)         0         0        21,888
  Allowance for Doubtful Accounts          216        319             0      (317) (4)      218
  Inventory Reserve                        576      1,375             0      (639) (5)    1,312


(1)  Approximately $7,341 represents assets written off as restructuring or impairment charges.

(2)  Amount represents assets fully amortized and netted against the reserve during the period.

(3)  Amount represents the valuation amount for deferred taxes, which reflect
     the net tax effects of temporary differences between the carrying amounts of assets and
     liabilities for financial reporting purposes and the amounts used for income tax purposes.

(4)  Collection of accounts previously written-off.

(5)  Inventory disposed
</TABLE>