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, 1999

                                       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)


     
          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, 1999 was 7,474,871 shares.



<PAGE>

                           ZOOM TELEPHONICS, INC.
                                      INDEX


                                                                      Page

Part I. Financial Information

  Item 1.  Consolidated Balance Sheets as of March 31, 1999
               and December 31, 1998                                    3

           Consolidated Statements of Operations for the Three
               Months Ending March 31, 1999 and 1998                    4

           Consolidated Statements of Cash Flows for the Three
               Months Ending March 31, 1999 and 1998                    5

           Notes to Consolidated Financial Statements               6 - 7

  Item 2.  Management's Discussion and Analysis of
               Financial Condition and Results of Operations        8 - 13


Part II.   Other Information

   Item 1. Legal Proceedings                                            14

   Item 6.  Exhibits and Reports on Form 8-K                            14

            Signatures                                                  15



<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                             ZOOM TELEPHONICS, INC.
                           Consolidated Balance Sheets

                                                     3/31/99            12/31/98
ASSETS                                             (Unaudited)         (Audited)

Current assets:

 Cash and cash equivalents                        $ 4,325,345       $  5,324,579
 Investment Securities                              8,658,929         13,529,052
 Accounts receivable, net of reserves for 
 doubtful accounts, returns and allowances of
 $5,670,169 at 3/31/99 and $5,687,751 at 12/31/98   6,864,383          7,244,374
 Inventories                                       14,506,483          8,893,269
 Refundable income taxes                              411,979             63,378
 Net deferred tax assets                            3,226,233          3,226,233
 Prepaid expenses and other assets                    820,295            230,355
                                                 ------------         ----------

                     Total current assets          38,814,005         38,511,240

Property and equipment, net                         4,037,071          3,748,303
Goodwill, net of accumulated amortization           
  of $449,601 at 3/31/99 and $408,728 at 12/31/98   3,760,209          1,226,184
Other non-current assets                               22,084             74,668
                                                 ------------        -----------

                                                  $46,633,369       $ 43,560,395
                                                 ============       ============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable                               5,415,648          3,236,391
     Accrued expenses                               3,519,201          1,808,637
                                                -------------       ------------

                     Total current liabilities      8,934,849          5,135,028
                                                -------------       ------------

Stockholders' equity:

 Common stock, no par value.  25,000,000 
   shares authorized;7,474,871 shares issued 
   and outstanding at March 31, 1999 and 
   December 31,1998                                25,190,579         25,190,579
   Retained earnings                               12,490,179         13,180,234
   Accumulated other comprehensive income              17,762             54,554
                                                -------------       ------------

                    Total stockholders' equity     37,698,520         38,425,367
                                                -------------       ------------

                                                 $ 46,633,369       $ 43,560,395

                                                =============       ============


<PAGE>


                             ZOOM TELEPHONICS, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)

                                                  Three Months Ending March  31,
                                                  ------------------------------
                                                    1999                 1998
                                                    ----                 ----
Net sales                                       $ 11,387,407        $ 18,758,702
Costs of goods sold                                7,326,255          13,557,817
                                                -------------       ------------

     Gross profit                                  4,061,152           5,200,885

Operating expenses:
     Selling                                       2,499,399           2,844,025
     General and administrative                    1,375,255           1,266,057
     Research and development                      1,503,550             967,496
                                                -------------        -----------

         Total operating expenses                  5,378,204           5,077,578
                                                -------------        -----------

     Income (loss) from operations                (1,317,052)            123,307

Other income, net                                    278,396             199,358
                                                -------------        -----------

     Income (loss) before income taxes            (1,038,656)            322,665

Income tax expense (benefit)                        (348,601)            123,086
                                                -------------        -----------

     Net income (loss)                          $   (690,055)       $    199,579
                                                ============        ============

Income (loss) per common share:

     Basic                                      $       (.09)       $        .03
                                                ============        ============

     Diluted                                    $       (.09)       $        .03
                                                ============        ============

Weighted average number of common
   shares outstanding:

     Basic                                         7,474,871           7,472,873
                                                ============        ============

     Diluted                                       7,474,871           7,483,799
                                                ============        ============

<PAGE>



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

                                                                                           Three Months Ending March 31,
 <S>                                                                                   <C>                   <C>
                                                                                          -----------------------------
                                                                                             1999                  1998             
                                                                                             ----                  ----            

Cash flows from operating activities:
     Net income (loss)                                                                $   (690,055)         $     199,579
     Adjustments to reconcile net income (loss)to net cash
      used in operating activities:
       Depreciation and amortization                                                        332,689               254,611
       Deferred income taxes                                                               (348,959)              123,086
      Changes in assets and liabilities:
        Accounts receivable                                                               1,910,580               784,290    
        Inventories                                                                      (4,569,906)             (200,851)
        Prepaid expenses and other assets                                                  (136,363)                6,253
        Accounts payable and accrued expenses                                             1,770,811            (3,351,101)   
                                                                                         -----------           -----------
             Net cash used in operating activities                                       (1,731,203)           (2,184,133)
                                                                                         -----------           -----------
                                                                                      

Cash flows from investing activities:
      Cash paid for in the aquisition of Hayes assets                                    (5,028,479)                   -
      Cash acquired in the aquisition of Hayes assets                                     1,216,221                    -
      Sale of investment securities                                                       4,833,331                    -
      Additions to licenses                                                                 (20,000)
      Additions to property, plant and equipment                                           (269,104)             (93,935)
                                                                                      --------------        -------------
      Net cash provided by (used in)investing activity                                       731,969             (93,935)
                                                                                      --------------        -------------

Cash flows from financing activity:
     Proceeds from exercise of stock options                                                      -               20,312
                                                                                      -------------         -------------

             Net cash provided by financing activities                                            -               20,312
                                                                                      -------------         -------------

Net decrease in cash and cash equivalents                                                  (999,234)          (2,257,756)

Cash and cash equivalents, beginning of period                                            5,324,579           11,281,337
                                                                                      -------------         -------------

Cash and cash equivalents, end of period                                              $   4,325,345         $  9,023,581
                                                                                      =============         ============


Supplemental disclosures of cash flow information:

    Cash paid during the period for:

      Interest                                                                        $           -         $           -
                                                                                      =============         =============
      Income taxes                                                                                -                     -
                                                                                      =============         =============
</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, 1998 included in the Company's 1998 Annual Report on Form 10-K.

     The  consolidated  balance  sheet as of March 31,  1999,  the  consolidated
statements  of income for the three months  ending March 31, 1999 and 1998,  and
the consolidated  statements of cash flows for the three months ending March 31,
1999 and 1998 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, 1999 are
not  necessarily  indicative of the results to be expected for the entire fiscal
year ending December 31, 1999.

(2)   Earnings Per Share

     The  reconciliation  of the  numerators and  denominators  of the basic and
diluted  net income  (loss) per  common  share  computations  for the  Company's
reported net income (loss) is as follows:

                                         Three months ending March 31,
                                          1999                  1998
                                   ------------------    -------------------
Basic:

   Net income (loss)                   $  (690,055)         $    199,579

Weighted average shares
   outstanding                           7,474,871             7,472,873
                                         ---------             ---------

Net income (loss) per share         $         (.09)      $           .03
                                         ==========            =========

Diluted:

    Net income (loss)                  $  (690,055)         $    199,579

Weighted average shares
   outstanding                           7,474,871             7,472,873

Net effect of dilutive stock
   options based on the
   Treasury stock method                         
   using average market price                    -                10,956

Weighted average shares
   outstanding                           7,474,871             7,483,799
                                         ---------             ---------

Net income (loss) per share         $         (.09)      $           .03
                                        ===========            =========


(3) Inventories

<TABLE>
<CAPTION>
<S>                                                                      <C>                    <C>       
         Inventories consist of the following:                             3/31/99               12/31/98

                  Raw materials                                           $ 7,768,631            $ 5,021,373
                  Work in process                                           2,816,242              1,764,123
                  Finished goods                                            3,921,610              2,107,773
                                                                          -----------             ----------

                                                                         $ 14,506,483            $ 8,893,269
                                                                         ============            ===========
</TABLE>
(4)   Acquisition

     In March 1999 the Company  entered into a series of separate  agreements to
purchase  various  assets,  licenses,  and  inventory  from Hayes  Microcomputer
Products, Inc. ("Hayes"). Hayes engaged in the business of design,  manufacture,
and support of computer  communications products for business,  government,  and
consumers  worldwide.  On October 9, 1998 Hayes filed for  reorganization  under
Chapter  11 of the United  States  Bankruptcy  Code,  Case No.  98-2276  through
98-2281, in the United States Bankruptcy Court ("the Court") for the District of
Delaware.

     In March 1999 Zoom  Telephonics  acquired most of the modem assets of Hayes
Corporation for $5.0 million in cash. The purchase included the Hayes, Practical
Peripherals,  Accura,  Optima, Century 2, and Cardinal brands and product rights
for the USA, Canada,  South & Central America,  Europe, and the Middle East. The
$5.0 million cash  payment is reflected in the $13.0  million cash  position and
investments at 3/31/99. Currently Zoom is attempting to finalize the purchase of
some  of  the  remaining  Hayes  assets,   including  Hayes  Asia  Pacific.  The
acquisitions were accounted for as purchases. The excess of cost over fair value
of net assets acquired is being  amortised on a  straight-line  method over five
years.

     The following summarizes the assets acquired and liabilities assumed in the
series of transactions:


              Assets acquired:
                     Cash                                          $  1,216,221
                     Accounts receivable                              1,530,589
                     Inventory                                        1,043,307
                     Property and equipment                             560,310
                     Goodwill (excess of cost over        
                      fair value of assets)                           2,574,898
                     Other assets                                       400,993
                                                                   -------------
                                                                   $  7,044,487

              Cash paid and liabilities assumed:
                     Cash paid                                         5,028,479
                     Accounts Payable                                    554,661
                     Accrued expenses                                    704,140
                     Negative Goodwill                                   757,590
                                                                   -------------
                                                                   $   7,044,487



     The  negative  goodwill  resulted  from  the  purchase  of the  Hayes  U.K.
business,  where the net assets acquired exceeded the cost. This transaction was
independent of other Hayes purchases.  The negative goodwill is reflected on the
Consolidated Balance Sheet as a reduction to current assets, totalling $757,590.

(5)   Comprehensive Income

     Statement of Financial  Accounting  Standard  ("SFAS") No. 130,  "Reporting
Comprehensive  Income"  establishes  rules  for the  reporting  and  display  of
comprehensive  income  and its  components;  however,  it has no  impact  on the
Company's net income or shareholders'  equity. SFAS No. 130 requires all changes
in  equity  from  nonowner  sources  to be  included  in  the  determination  of
comprehensive income.

The components of comprehensive income, net of tax, are as follows:

                                         Three months ending March 31,
                                          1999                  1998
                                   ------------------    -------------------

   Net income (loss)                   $  (690,055)         $    199,579
   Net unrealized holding loss
    on investment securities               (36,792)                    -
                                       ------------         ------------
   Comprehensive income(loss)          $  (726,847)         $    199,579
                                       ============         ============ 

<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
$11,387,407  and a net loss of $690,055 for the Company's  first quarter  ending
March 31, 1999 compared to net sales of $18,758,702 and a net income of $199,579
for the first quarter ending March 31, 1998.  Earnings per share  decreased to a
loss of $0.09 for the first  quarter of 1999 compared with earnings of $0.03 for
the first quarter of 1998.

     Net sales for the quarter  ending  March 31, 1999 were 39.3% lower than the
prior year  quarter,  reflecting  a decrease  in the  average  selling  price of
faxmodems and a decline in total units sold.  Although  sales of 56K modem units
rose  significantly,  this could not offset the dramatic  drop in sales of 33.6K
modem units. The overall net sales decrease compared to the quarter ending March
31,  1998 was  comprised  of a sales  decline  of 43.9% in North  America  and a
decline of 12.3% in international markets outside North America.

     Gross profit as a percentage of net sales increased to 35.7% in the quarter
ending  March 31,  1999 from 27.7% in the quarter  ending  March 31,  1998.  The
increase was due to the  favorable  impact of  advantageously  negotiated  modem
materials  purchased  in the second half of 1998 and the first  quarter of 1999.
The impact of these  favorable  purchases is realized  when units are sold.  The
favorable effect is expected to continue  through  1999,with a reduced impact in
later quarters.  The net result of this favorability in gross margin for 1999 is
unclear  because of expected  continued  erosion of analog modem selling prices.
Partially  offsetting  the favorable  material costs was an increase in overhead
costs per unit due to the  decline  in  production  volume in the first  quarter
ending March 31, 1999 compared to the first quarter ending March 31, 1998.

     Selling  expenses  during the first quarter of 1999 decreased in dollar
amount to $2,499,399 or 21.9% of net sales from $2,844,025 or 15.2% of net sales
in  the  first  quarter  of  1998,  reflecting  reductions  in  advertising  and
promotions,   sales  commissions  and  shipping  costs.  These  reductions  were
primarily related to the Company's lower sales volume.

     General and  administrative  expenses were $1,375,255 or 12.1% of net sales
during the first  quarter of 1999 compared to $1,266,057 or 6.7% of net sales in
the first quarter of 1998.  The increase was  primarily  due to increased  legal
expenses, depreciation expense and personnel costs.

     Research and development  expenses  increased to $1,503,550 or 13.2% of net
sales during the first quarter of 1999 from $967,496 or 5.2% of net sales in the
first quarter of 1998.  The increase in expenses was primarily due to additional
personnel  consistent  with the  broadening of the Company's  non-modem  product
lines.

     In March  1999 the  Company  acquired  most of the  modem  assets  of Hayes
Microcomputer  Products,  Inc.  ("Hayes") for $5.0 million in cash. The purchase
included  the  Hayes,  Practical  Peripherals,  Accura,  Optima,  Century 2, and
Cardinal brands and product rights for the USA, Canada, South & Central America,
Europe,  and the Middle East.  The $5.0 million cash payment is reflected in the
$13.0  million  cash  position and  investments  at 3/31/99.  Currently  Zoom is
attempting  to finalize  the  purchase of some of the  remaining  Hayes  assets,
including Hayes Asia Pacific for an additional  purchase price of  approximately
$1.1 million.

     The  acquisitions  of the Hayes  assets  did not  significantly  impact the
Company's sales and losses for the first quarter,  since the  acquisitions  took
place at the end of the quarter.  During its  bankruptcy  proceeding,  Hayes had
ceased to manufacture and deliver products to customers. In addition, there were
necessary  delays  between  the  bankruptcy  court  approval of the sale and the
actual  transfer of the assets.  Zoom has recently  restarted  production of key
Hayes products for the U.S. and U.K.  markets.  Although Zoom  anticipates  some
revenue  contribution  from  sales of the Hayes  acquired  product  lines in the
second quarter, the Company does not expect the full impact of those sales to be
reflected  until at least the third  quarter of 1999.  Increased  expenses to be
incurred  in  connection  with the  acquisitions  include  payroll  and  related
expenses  associated  with  the  hiring  of  approximately  26  of  Hayes'  U.K.
employees,  and increased sales and marketing  expenses.  The Company intends to
use its existing sales  resources and channels to sell the Hayes products in the
U.S. The net impact of the Hayes business on the Company's  financial results in
the second quarter of 1999 is unclear at this time.

Liquidity and Capital Resources

     Zoom ended the first  quarter  of 1999 with a strong  balance  sheet,  with
stockholders'  equity of $37,698,520 or $5.04 book value per share,  cash,  cash
equivalents and investments of $12,984,274,  and working capital of $29,879,156.
In addition,  the Company has a $5 million  secured  line of credit.  No amounts
were outstanding under this line of credit as of March 31, 1999.

     Operating  activities used $1,731,203 in cash during the first three months
of 1999.  Cash was provided by the increase of accounts  payable of  $1,770,811,
the  decline  in  accounts  receivable  of  $1,910,580,   and  depreciation  and
amortization  of  $332,689.  Cash  was  used by the net  loss of  $690,055,  the
increase in  inventories  of  $4,569,906,  the increase in prepaid  expenses and
other assets of $136,363,  and the  increase in deferred and  refundable  income
taxes of $348,959.  The increase in inventory is primarily  attributable  to the
purchases  of  advantageously   negotiated  modem  materials  intended  for  use
throughout 1999.

     Zoom's capital  expenditures  of $269,104  during the first three months of
1999 included purchases of computer  equipment and continuing  renovation of the
Zoom headquarters. The Company does not have any significant capital commitments
other  than the  completion  of the Hayes  acquisition  for  approximately  $1.1
million,  and it  anticipates  that it will continue with modest  investments in
equipment and in improvements to its facilities during the year.

     During the first three  months of 1999 the Company sold  $4,833,331  of its
investment  securities  in order to finance  the  purchase  of most of the modem
assets of Hayes Microcomputers  Products,  Inc. During the first three months of
1999 no employee stock options were exercised.

     The Company believes that its existing cash,  together with funds generated
from operations and available  sources of financing,  will be sufficient to meet
normal working capital  requirements for the rest of 1999.  Additional financing
may be needed in the event sales increase substantially or if significant losses
are incurred.


Year 2000 Readiness Statement

     The year 2000 issue is the potential for system and  processing  failure of
date-related data and the result of computer-controlled systems using two digits
rather than four to define the applicable year. For example,  computer  programs
that have  date-sensitive  software may  recognize a date using "00" as the year
1900  rather  than  the  year  2000.  Systems  that  do not  properly  recognize
date-sensitive  information  when the year changes to 2000 could generate system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary  inability to process  transactions,  send invoices or
engage in similar ordinary business activities.

     The Company is evaluating the year 2000 issue with respect to its financial
and management  information  systems,  its products and its  suppliers.  At this
point in its  assessment,  the Company is not  currently  aware of any year 2000
problems that are reasonably  likely to have a material  effect on the Company's
business,   mission  critical  systems,   results  of  operations  or  financial
condition,  without  taking  into  account the  Company's  efforts to avoid such
problems.

     The Company is  completing  its review of its  management  and  information
systems for year 2000  compliance  and has identified  application  software and
hardware,  which must be  upgraded to become  year 2000  compliant.  The Company
intends  to  generally  upgrade  its  management  and  information   systems  in
conjunction  with its upgrade to become year 2000  compliant by September  1999.
The  Company  believes  that  the  cost of this  upgrade  will be  approximately
$100,000 to $300,000, the majority of which will be capitalized. There is a risk
that,  notwithstanding  its  internal  review,  if the Company has not  properly
identified  all year 2000  compliance  issues with respect to its management and
information  systems,  the Company may not be able to  implement  all  necessary
changes to these  systems on a timely  basis and within  budget.  Such a failure
could result in a material disruption to the Company's  business,  including the
inability to track and timely fill orders,  which could have a material  adverse
effect on its business, results of operations and financial condition.

     The Company has evaluated  its current  products and believes that they are
year 2000 compliant.  The Company has also undertaken a general review of modems
previously  sold by it that may  continue  to be  under  warranty  to  determine
whether  those  products  are year 2000  compliant.  Based upon its  preliminary
assessment, the Company believes that the proper operation of its modems are not
date dependent and therefore  should continue to function  properly on and after
the year 2000. In order to assure that this is the case,  the Company is seeking
information  from its major  suppliers,  particularly of its modem chipsets,  to
confirm  that they have been year 2000  compliant.  The  Company has sent a year
2000 Readiness Letter/Questionnaire to its major suppliers and initial responses
from  the  Company's   chipset   manufacturers   have  confirmed  the  Company's
understanding  that the chipsets used by the Company are not date  sensitive and
are therefore year 2000 compliant.  However,  the Company cannot assure that its
chipset  manufacturers  will  provide  the  Company  with  accurate  information
regarding   their  year  2000   compliance.   Should  any  critical   components
incorporated  in the  Company's  products fail to be year 2000  compliant,  such
failure could result in warranty  claims and have a material  adverse  effect on
its business, results of operations and financial condition.

     The Company's products and software are often sold to be integrated into or
interface with third party equipment or software. In addition, the Company often
packages its modems for retail sale with software provided by other vendors. The
Company does not alter this software in any date  sensitive  way. The Company is
in the process of seeking  information  from its software vendors to assure that
the software  packaged  with its products will be year 2000  compliant,  and has
sent a year 2000 Readiness Letter/Questionnaire to its major software suppliers.
While it is possible that some of this software may be adversely affected by the
year  2000,  the  Company  is not aware of any  packaged  software  having  this
problem.  Failure of third-party  equipment or software to operate properly with
regard  to the year 2000 and  thereafter  could  require  the  Company  to incur
unanticipated  expenses  to remedy  any  problems,  which  could have a material
adverse  effect on the Company's  business,  results of operations and financial
condition.

     The Company is also exposed to the risk that it could  experience  material
shipment  delays from its major  component  suppliers or contract  assemblers or
material sales delays from its major  customers due to year 2000 issues relating
either to their management  information or production  systems.  The Company has
inquired of these  suppliers and contract  assemblers in an attempt to ascertain
their year 2000  readiness.  At this time, the Company is unable to estimate the
nature or extent of any potential  adverse impact  resulting from the failure of
third parties, such as its suppliers,  and contract assemblers and customers, to
achieve year 2000 compliance.  Moreover,  such third parties,  even if year 2000
compliant,  could experience  difficulties  resulting from year 2000 issues that
may affect  their  suppliers,  service  providers  and  customers.  As a result,
although the Company does not currently  anticipate  that it will experience any
material  shipment  delays from their major  product  suppliers  or any material
sales  delays  from its major  customers  due to year 2000  issues,  these third
parties could  experience year 2000 problems that could have a material  adverse
effect on the Company's business, results of operations and financial condition.

     Other than its activities  described  above,  the Company does not have and
does not plan to develop a contingency plan to address year 2000 issues.  Should
any  unanticipated  significant year 2000 issues arise, the Company's failure to
implement  such a contingency  plan could have a material  adverse affect on its
business, financial condition and results of operation.

     To the extent that the Company does not identify any material non-compliant
year 2000 issues  affecting the Company or third parties,  such as the Company's
suppliers,  service  providers and customers,  the most reasonably  likely worst
case year 2000 scenario is a systemic failure beyond the control of the Company,
such as a  prolonged  telecommunications  or  electrical  failure,  or a general
disruption in United States or global business activities that could result in a
significant  economic  downturn.  The Company believes that the primary business
risks, in the event of such failure or other  disruption,  would include but not
be limited to, loss of customers or orders, increased operating costs, inability
to obtain  inventory on a timely basis,  disruptions  in product  shipments,  or
other  business  interruptions  of a  material  nature,  as  well as  claims  of
mismanagement, misrepresentation, or breach of contract, any of which could have
a material adverse effect on the Company's  business,  results of operations and
financial condition.

Euro Conversion

     On January 1, 1999,  11 of the 15 member  countries of the  European  Union
established a fixed conversion rate between their existing sovereign  currencies
and the  Euro.  As of  January  1,  2002,  the  transition  to the Euro  will be
complete.  The Company has significant  operations within the European Union and
is currently  preparing  for the Euro  conversion.  The Euro may impact  general
economic  conditions  such as interest  and foreign  exchange  rates  within the
participating  countries  or in other  areas  where the  Company  operates.  The
Company  is in the  process of  analyzing  the impact of the Euro with a view to
minimizing the effects on the Company's operations.  The Company does not expect
the costs of upgrading its systems to be material.

     A portion of the  Company's  revenues  are subject to the risks  associated
with  international  sales.  Although most of the Company's  product  prices are
denominated  in the United  States  currency,  customers  in  foreign  countries
generally  evaluate  purchases of products  such as those sold by the Company on
the purchase price expressed in the customer's currency. As a result, the impact
of and  economic  conditions  relating to the Euro  (including  fluctuations  in
foreign currency  exchange rates,  particularly with respect to the U.S. dollar)
may have a material  adverse affect on the demand for the Company's  products as
well  as  on  the  Company's  business,   financial  condition  and  results  of
operations.

Recently Issued Accounting Standards

     The Financial  Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging  Activities,  which establishes  accounting and reporting  standards for
derivative instruments embedded in other contracts  (collectively referred to as
derivatives),  and for hedging  activities.  This Statement is effective for all
fiscal  quarters of fiscal years  beginning after June 15, 1999. The adoption of
this  Statement  is not  expected  to have a  material  impact on the  Company's
consolidated financial position or results of operations.

     The AICPA Accounting  Standards Executive Committee has issued Statement of
Position (`SOP") 98-1, Accounting for the Cost of Computer Software Developed or
Obtained for Internal  Use.  This SOP requires that certain costs related to the
development and purchase of  internal-use  software be capitalized and amortized
over the  estimated  useful life of the  software,  and is effective  for fiscal
years  beginning  after  December 15,  1998.  The SOP also  requires  that costs
related  to the  preliminary  project  stage and post  implementation/operations
stage in an internal-use  computer software  development  project be expensed as
incurred.  The  adoption  of this  SOP did not  have a  material  impact  on the
Company's consolidated financial position or results of operations.

     The AICPA  Accounting  Standards  Executive  Committee has issued SOP 98-5,
Reporting  on the Costs of Start-up  Activities.  This SOP  requires  that costs
incurred during start-up activities,  including  organization costs, be expensed
as incurred,  and is effective for the fiscal years beginning after December 15,
1998.  The adoption of this SOP did not have a material  impact on the Company's
consolidated financial position or results of operations.

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

     The Company owns financial  instruments  that are sensitive to market risks
as  part  of its  investment  portfolio.  The  investment  portfolio  is used to
preserve  the  Company's  capital  until  it is  required  to  fund  operations,
including  the  Company's  research and  development  activities.  None of these
market-risk  sensitive  instruments are held for trading  purposes.  The Company
does not own derivative financial instruments in its investment  portfolio.  The
investment  portfolio  contains  instruments  that are  subject to the risk of a
decline in interest rates.

     Investment  Rate Risk - The Company's  investment  portfolio  includes debt
instruments  that are primarily  United States  government  bonds and high grade
corporate bonds of less than three years in maturity. These bonds are subject to
interest  risk,  and could  decline in value if interest  rates  fluctuate.  The
Company's  investment portfolio also consists of certain commercial paper, which
is  also  subject  to  interest  rate  risk.  Due  to  the  short  duration  and
conservative  nature of these instruments,  the Company does not believe that it
has a material exposure to interest rate risk.


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

     This report contains forward-looking  information relating to Zoom's plans,
expectations  and  intentions,  including  without  limitation the financial and
other contributions expected, in connection with Zoom's acquisition of the Hayes
modem assets  referenced in this report,  Zoom's expected  favorable impact from
the sale of  modems  using  materials  purchased  at  favorable  prices,  Zoom's
anticipation  to  continue  to  make  modest  investments  in  equipment  and in
improvements  to its facilities  during fiscal year 1999, and the sufficiency of
Zoom's cash, together with funds generated from operations and available sources
of financing,  to meet normal working capital  requirements for the remainder of
fiscal  year  1999.  Actual  results  may be  materially  different  than  those
expectations  as a result of known and unknown risks,  including those set forth
below.  Acquisitions  involve  numerous  risks,  including  difficulties  in the
assimilation of operations and products of acquired  businesses,  the ability to
manage  geographically  remote units and the potential  loss of key employees of
the acquired companies.  Other risks relating to the forward-looking  statements
contained in this report,  include,  without  limitation:  significant risks and
uncertainties  generally  applicable to modem and data communications  products,
such as rapid technological change and intense  competition,  uncertainty of new
product  development,  early stage of development of certain data communications
markets,  uncertainty  of market  growth,  and  overall  product  demand for 56K
modems; the ability to obtain additional  financing,  if required,  at favorable
terms; Zoom's dependence upon a principal supplier for its modem chipsets and on
third-party assemblers;  the concentration of Zoom's customers; risks of product
returns and  price-protection,  sales  channel risks and risks  associated  with
international  sales;  and other  risks set  forth in  Zoom's  filings  with the
Securities  and Exchange  Commission.  Zoom cautions  readers not to place undue
reliance upon any such  forward-looking  statements,  which speak only as of the
date made.  Zoom  expressly  disclaims any  obligation or undertaking to release
publicly any updates or revisions to any such  statements  to reflect any change
in the Zoom's  expectations or any change in events,  conditions or circumstance
on which any such statement is based.


<PAGE>



 PART II - OTHER INFORMATION

ITEM 1. - Legal Proceedings

               No material developments in the quarter ended March 31, 1999.




ITEM 6 - Exhibits and reports on Form 8-K


            (a) Exhibit             Description                            Page
                -------             -----------                            ----
                  2.1               Asset Purchase Agreement Between
                                     Zoom Telephonics, Inc.and Hayes
                                     Microcomputer Products, Inc.
                                     Dated March 8, 1999                  16-22
                  2.2               Asset Purchase Agreement Between
                                     Zoom Telephonics, Inc.and Hayes
                                     Microcomputer Products, Inc.
                                     Dated March 29, 1999                 23-29

                27.                  Financial Data Schedule                 30


            (b) Reports on Form 8-K
                -------------------
                No  reports  on Form 8-K were  filed by the  Company  during the
                quarter ending March 31, 1999.



<PAGE>


                             ZOOM TELEPHONICS, INC.

                        FINANCIAL INFORMATION NOT AUDITED


The preceding  financial  information,  with the  exception of the  consolidated
balance  sheet at December  31,  1998,  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, 1999                   By: /s/ Frank Manning
                                     --------------------------
                                     Frank B. Manning, President



Date: May 14, 1999                   By: /s/ Robert Crist
                                     -------------------------
                                     Robert Crist, Vice President of Finance
                                     and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)