UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                     FORM 10-Q


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

                                For the quarterly period ended March 31, 1997

                                         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 0-18672


                             ZOOM TELEPHONICS, INC.
                  (Exact Name of Registrant as Specified in its Charter)


                          Canada                  04-2621506
        (State or Other Jurisdiction of        (I.R.S.Employer
         Incorporation or Organization)         Identification No.)


         207 South Street, Boston, Massachusetts              02111
              ---------------------------------------         -----
        (Address of Principal Executive Offices in the U.S.)  (Zip Code)


         1200 Royal Center
         1055 West Georgia Street, Vancouver, B.C.                    V6E 3P3
         (Address of Principal Executive Offices in Canada)         (Zip Code)

         Registrant's Telephone Number, Including Area Code:   (617) 423-1072

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 [    ]


The number of shares outstanding of the registrant's Common Stock, No Par Value,
as of May 14, 1997 was 7,472,371 shares.



<PAGE>


                                              ZOOM TELEPHONICS, INC.
                                                       INDEX


                                                                          Page

Part I. Financial Information

  Item 1.  Consolidated Balance Sheets as of March 31, 1997
               and December 31, 1996                                         3

           Consolidated Statements of Operations for the Three
               Months Ending March 31, 1997 and 1996                         4

           Consolidated Statements of Cash Flows for the Three
               Months Ending March 31, 1997 and 1996                         5

           Notes to Consolidated Financial Statements                        6

  Item 2.  Management Discussion and Analysis of
               Financial Condition and Results of Operations             7 - 8


Part II.   Other Information

   Item 1. Legal Proceedings                                                 9

   Item 6. Exhibits and Reports on Form 8-K                                  9

           Signatures                                                       10


<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                                                    ZOOM TELEPHONICS, INC.
                                                  Consolidated Balance Sheets

<TABLE>
                                                                                          3/31/97              12/31/96

<CAPTION>
ASSETS                                                                                   (Unaudited)               (Audited)

Current assets:

<S>                                                                                   <C>                  <C>           
     Cash and cash equivalents                                                        $    8,970,071       $    9,172,186
     Accounts receivable, net of reserves
        for doubtful accounts, returns and allowances of
        $3,917,580 at 3/31/97 and $3,564,101 at 12/31/96                                  16,205,942           18,970,041
     Inventories                                                                          19,011,814           19,057,575
     Recoverable income taxes                                                                911,929            1,219,000
     Deferred income taxes                                                                 2,032,683            2,032,683
     Prepaid expenses and other assets                                                       331,059              532,808
                                                                                      --------------       --------------

                           Total current assets                                           47,463,498           50,984,293

Property and equipment, net                                                                4,188,762            4,081,406
Goodwill                                                                                   1,518,622            1,558,764
Other non-current assets                                                                     138,804              157,691
                                                                                      --------------       --------------

                                                                                      $   53,309,686       $   56,782,154
                                                                                      ==============       ==============
<CAPTION>


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

<S>                                                                                   <C>                  <C>      
     Accounts payable                                                                      5,657,359            8,074,472
     Accrued expenses                                                                        970,742            1,352,725
                                                                                      --------------       --------------
                           Total current liabilities                                       6,628,101            9,427,197

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

Stockholders' equity:

     Common stock, no par value 25,000,000 shares  authorized;
       7,472,371 shares issued and outstanding at March 31, 1997
       and 7,446,842 at December 31, 1996                                                 25,173,375           24,890,468
     Retained earnings                                                                    21,508,210           22,464,489
                                                                                      --------------       --------------

                           Total stockholders' equity                                     46,681,585           47,354,957
                                                                                      --------------       --------------

                                                                                      $   53,309,686       $   56,782,154
                                                                                      ==============       ==============

</TABLE>

<PAGE>


                                                 ZOOM TELEPHONICS, INC.
                                         Consolidated Statements of Operations
                                                      (Unaudited)
<TABLE>
<CAPTION>

                                                                                          Three Months Ending March  31,
                                                                                           1997                   1996


<S>                                                                                   <C>                   <C>           
Net sales                                                                             $   17,950,711        $   33,245,098
Costs of goods sold                                                                       14,692,200            25,462,178
                                                                                      --------------        --------------

     Gross profit                                                                          3,258,511             7,782,920

Operating expenses:
     Selling                                                                               2,805,891             2,705,588
     General and administrative                                                            1,056,266               828,003
     Research and development                                                              1,043,344               611,084
                                                                                      --------------        --------------

         Total operating expenses                                                          4,905,501             4,144,675
                                                                                      --------------        --------------

     Income (loss) from operations                                                       (1,646,990)             3,638,245

Other income (expense), net                                                                  129,087              (124,982)
                                                                                      --------------        ---------------

     Income (loss) before income taxes                                                   (1,517,903)             3,513,263

Income tax expense (benefit)                                                               (561,624)             1,300,000
                                                                                      --------------        --------------

     Net income (loss)                                                                $    (956,279)        $    2,213,263
                                                                                      ==============        ==============

Income (loss) per common and common
   equivalent share:

     Primary                                                                          $        (.13)        $          .35
                                                                                      ==============        ==============

     Fully diluted                                                                    $        (.13)        $          .35
                                                                                      ==============        ==============

Average common and common equivalent
   shares outstanding:

     Primary                                                                               7,524,766             6,359,287
                                                                                      ==============        ==============

     Fully diluted                                                                         7,524,766             6,359,287
                                                                                      ==============        ==============


</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                       ZOOM TELEPHONICS, INC.
                                                Consolidated Statements of Cash Flows
                                                             (Unaudited)

                                                                                            Three Months Ending March 31,
                                                                                           1997                  1996

<S>                                                                                   <C>                   <C>
Cash flows from operating activities:
     Net income (loss)                                                                $   (956,279)         $   2,213,263
     Adjustments to reconcile net income to net cash
      used in operating activities:
      Depreciation and amortization                                                         210,715               116,838
      Changes in assets and liabilities:
        Accounts receivable                                                               2,764,099            (1,635,105)
        Inventories                                                                          45,761               419,923
        Refundable income taxes                                                             307,071                     -
        Deferred registration fees                                                                -              (350,000)
        Prepaid expenses and other assets                                                   220,636                 7,481
        Accounts payable and accrued expenses                                            (2,799,096)           (5,384,700)
        Accrued income taxes                                                                      -               652,308
        Tax benefit from exercise of non-qualified
            stock options                                                                    78,675               153,692
                                                                                      -------------         -------------

             Net cash used in operating activities                                         (128,418)           (3,806,300)
                                                                                      -------------         --------------

Cash flows from investing activities:
      Additions to property, plant and equipment                                           (277,929)             (213,161)
                                                                                      -------------         -------------

Cash flows from financing activities:
      Net borrowings under revolving bank line of credit                                          -             4,100,000
      Proceeds from exercise of stock options                                               204,232               367,200
                                                                                      -------------         -------------

             Net cash provided by financing activities                                      204,232             4,467,200
                                                                                      -------------         -------------

Net increase (decrease) in cash and cash equivalents                                       (202,115)              447,739

Cash and cash equivalents, beginning of period                                            9,172,186               150,671
                                                                                      -------------         -------------

Cash and cash equivalents, end of period                                              $   8,970,071          $    598,410
                                                                                      =============          ============


Supplemental disclosures of cash flow information:

    Cash paid during the year for:

      Interest                                                                        $           0         $      88,178
                                                                                      =============         =============
      Income taxes                                                                                0               494,000
                                                                                      =============         =============
</TABLE>


<PAGE>


                                              ZOOM TELEPHONICS, INC.
                                    Notes to Consolidated Financial Statements
                                                    (Unaudited)


(1) Basis of Presentation

         The consolidated  financial statements of Zoom Telephonics,  Inc., (the
"Company")  presented  herein  have been  prepared  pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-Q and do not
include  all of the  information  and note  disclosures  required  by  generally
accepted accounting  principles.  These statements should be read in conjunction
with the consolidated financial statements and notes thereto for the year ending
December 31, 1996 included in the Company's 1996 Annual Report on Form 10-K.
         The  consolidated  balance sheet as of March 31, 1997, the consolidated
statements  of income for the three months  ending March 31, 1997 and 1996,  and
the consolidated  statements of cash flows for the three months ending March 31,
1997 and 1996 are  unaudited,  but,  in the opinion of  management,  include all
adjustments  (consisting of normal,  recurring adjustments) necessary for a fair
presentation of results for these interim periods.
         The results of  operations  for the three months  ending March 31, 1997
are not  necessarily  indicative  of the results to be  expected  for the entire
fiscal year ending December 31, 1997.



(2) Inventories


<TABLE>
<CAPTION>
         Inventories consist of the following:                             3/31/97               12/31/96

<S>                                                                      <C>                    <C>         
                  Raw materials                                          $ 11,853,325           $ 11,778,311
                  Work in process                                           3,434,211              2,968,064
                  Finished goods                                            3,724,278              4,311,200
                                                                         ------------           ------------

                                                                         $ 19,011,814           $ 19,057,575
                                                                         ============           ============
</TABLE>

(3) Stock Options

Proceeds from the exercise of stock under the  Company's  stock option plans and
income tax benefits  attributable  to stock  options  exercised  are credited to
common  stock.  During the three  months  ending  March 31,  1997,  options with
respect to 25,529  shares were  exercised and such  exercises  resulted in a tax
benefit to the Company of $78,675.




<PAGE>


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



Results of Operations


            Zoom Telephonics,  Inc. ("Zoom" or "the Company") recorded net sales
of $17,950,711 and a net loss of $956,279 for the Company's first quarter ending
March 31, 1997. Earnings per share declined from a profit of $0.35 for the first
quarter of 1996 to a loss of $0.13 for the first quarter of 1997.

          Net sales for the quarter ending March 31, 1997 decreased  $15,294,387
or 46% from the first  quarter of 1996.  This  decrease was  primarily  due to a
decrease in average  selling price of faxmodems and a decrease in units shipped.
During  the first  quarter  of 1997 the vast  majority  of sales  came from V.34
faxmodems,  which  suffered from severe price  competition  and reduced  demand,
partly due to customer demand for faxmodems  incorporating 56K technology.  Zoom
is now shipping 56K faxmodems.

            Gross  margin  declined  to 18.2% in the first  quarter of 1997 from
23.4% in the first quarter of 1996, reflecting increased price competition which
caused  decrease  in  selling  prices  and  continued  high  charges  for  price
protection.  Writedowns for modem chipset price drops and increased reserves for
scrap and obsolescence also contributed to the reduced gross margin percentage.

                  Selling  expenses  during the first quarter of 1997  increased
3.7% to $2,805,891 or 15.6% of net sales from $2,705,588 or 8.1% of net sales in
the first quarter of 1996.  Cooperative  advertising  allowances,  personnel and
occupancy  costs  increased in the first  quarter of 1997  compared to the first
quarter of 1996.  These  increases  were  offset by a  significant  decrease  in
commissions paid as a result of lower sales.

                  General  and   administrative   expenses  increased  27.7%  to
$1,056,266  or 5.9% of net sales during the first  quarter of 1997 from $828,003
or 2.5% of net sales in the first  quarter of 1996.  The increase was  primarily
due to increased  personnel  expenses,  particularly in the information  systems
department.

                  Research  and   development   expenses   increased   70.7%  to
$1,043,344  or 5.8% of net sales during the first  quarter of 1997 from $611,084
or 1.8% of net sales in the first quarter of 1996.  The increase in expenses was
primarily  due to the addition of  personnel to  accelerate  the  Company's  new
product development efforts.

         The Company  experienced a loss of $956,279 or 5.3% of net sales during
the first  quarter of 1997 compared to income of $2,213,263 or 6.7% of net sales
in the first  quarter of 1996.  The decline was  primarily  due to lower  sales,
lower gross profit, and higher operating expenses, particularly for research and
development.


<PAGE>


Liquidity and Capital Resources

            Zoom ended the first  quarter of 1997 with a strong  balance  sheet.
Working  capital  declined  slightly  during  the  quarter to  $40,835,397  from
$41,557,096  at December 31, 1996 while the current  ratio  improved to 7.2 from
5.4. Cash and cash equivalents decreased slightly to $8,970,071 from $9,172,186.
In addition, the Company has an unused $10 million line of credit.

           Operating  activities  used $128,418 in cash during the first quarter
of 1997. During this period,  accounts  receivable  decreased  $2,764,099 due to
lower sales in the first quarter. This source of cash was offset by the net loss
of $956,279 and a reduction of accounts  payable and other  accrued  expenses by
$2,799,096.  Other sources of cash were decreases in refundable  income taxes of
$307,071 and other prepaid expenses of $220,636.

         Zoom's  capital  expenditures  of $277,929  during the first quarter of
1997 reflected purchases of computer equipment and continuing  renovation of its
headquarters.  Although  the  Company  does  not have  any  significant  capital
commitments,  it anticipates that it will continue to invest in equipment and in
improvements to its facilities during the year.

         During the first  quarter of 1997,  financing  activities  provided the
Company  with  $204,232 of cash  proceeds  from the  exercise  of  employee  and
director stock options.

         The  Company  believes  that its  existing  cash,  together  with funds
generated from operations and available sources of financing, will be sufficient
to meet its normal working capital requirements in 1997.

"Safe Harbor" Statement under the Private Securities Litigation 
Reform Act of 1995

Forward-looking   statements  in  this  report,   including  without  limitation
statements  relating  to the  adequacy  of the  Company's  resources,  are  made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
involve  risks  and  uncertainties,   including  without  limitation:  potential
quarterly fluctuations in the Company's operating results, seasonality of sales,
rapid  technological  change,  competition,  the  concentration of the Company's
customers,  the  Company's  dependence  upon a principal  supplier for its modem
chipsets  and  on  third-party  assemblers,   risks  associated  with  inventory
management,  risk of product returns and price-protection,  sales channel risks,
risks associated with international  sales, the ability of the Company to manage
its growth,  the Company's  reliance on key  employees,  risks  associated  with
proprietary technology, and other risks and uncertainties indicated from time to
time in the Company's filings with the Securities and Exchange Commission.






<PAGE>


PART II - OTHER INFORMATION

ITEM 1. - Legal Proceedings

      On March 21,  1996,  James A.  Storer  and REFAC  International,  Ltd.,  a
company  engaged in the business of acquiring  and  licensing  patents,  filed a
complaint in the United States District Court, District of Massachusetts, naming
Hayes  Microcomputer  Products,  Inc. and the Company as  defendants in a patent
lawsuit.    The   complaint    alleges   that   the   V.42   bis   international
telecommunications  standard for data  compression in computer modems is covered
by a patent owned by the plaintiffs, and the defendants' modems that incorporate
this  standard  infringe the patent.  While the complaint  seeks to  permanently
enjoin the defendants from  infringing the patent and monetary  damages for past
infringement, REFAC has offered to negotiate a royalty for licensing the patent.
The  Company  believes  that  the  alleged   infringement   involves  technology
incorporated in chipsets provided to it from Rockwell International and that, if
so, the Company will be indemnified by Rockwell.  By an agreement dated July 12,
1996 Rockwell has agreed,  subject to certain  conditions,  to assume defense of
Zoom against the action.

      On April 10, 1997,  Carol Levy,  on behalf of the interests of the general
public,  filed a claim in the Marin County Superior Court  (California)  against
Zoom  together  with  numerous  other  corporation   defendants  including  Boca
Research,  Inc.,  Cisco  Systems,  Inc.,  Compaq  Computer  Corporation,  Lucent
Technologies,  Inc., Motorola,  Inc. and Rockwell  Semiconductor  Systems, Inc.,
alleging that the defendants  have engaged in unfair  competition due to alleged
false  advertising  relating  to the "K56"  modems.  The  Plaintiff  is  seeking
monetary damages, injunctive relief, and attorneys fees. Zoom, together with the
other  defendants,  deny the allegations  and plan to vigorously  defend against
this claim.

ITEM 6 - Exhibits and reports on Form 8-K

            (a) Exhibit             Description                             Page
                -------         --------------------------                  ----
                  11            Statement Re: Computation of                  11
                                Per Share Earnings


            (b) No reports on Form 8-K were filed by the Company during the 
                quarter ending March 31, 1997



<PAGE>


                                      ZOOM TELEPHONICS, INC.

                                 FINANCIAL INFORMATION NOT AUDITED


The preceding  financial  information,  with the  exception of the  consolidated
balance  sheet at December  31,  1996,  has not been  audited.  However,  in the
opinion of  management,  all  material  adjustments,  consisting  only of normal
recurring  accruals  necessary  to present a fair  statement  of the results for
these  periods,  have been  reflected.  The  results  for these  periods are not
necessarily indicative of the results for the full fiscal year.




                                                      SIGNATURES

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

                                                        ZOOM TELEPHONICS, INC.


Date: May 14, 1997                             By:    /s/ Frank Manning
                                                     --------------------------
                                                     Frank B. Manning, President



Date: May 14, 1997                             By:    /s/ Steven T. Shedd
                                                      -------------------------
                                     Steven T. Shedd, Vice President of Finance
                                                    and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)