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 September 30, 1996

                                    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 Canad                 (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 November 13, 1996 was 7,446,104 shares.



<PAGE>


                               ZOOM TELEPHONICS, INC.
                                        INDEX


                                                                       Page

Part I. Financial Information

Item 1.  Consolidated Balance Sheets as of  September 30, 1996
               and December 31, 1995                                     3

         Consolidated Statements of Income for the Three
               Months Ending September 30, 1996 and 1995                 4

         Consolidated Statements of Income for the Nine
               Months Ending September 30, 1996 and 1995                 5

         Consolidated Statements of Cash Flows for the Nine
               Months Ending September 30, 1996 and 1995                 6

         Notes to Consolidated Financial Statements                  7 - 8

Item 2.  Management's Discussion and Analysis of
               Financial Condition and Results of Operations        9 - 11


Part II.Other Information

Item 1.  Legal Proceedings                                              12

Item 6.  Exhibits and Reports on Form 8-K                               12

         Signatures                                                     13


<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                             ZOOM TELEPHONICS, INC.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                   9/30/96         12/31/95
ASSETS 
                                                                                  (Unaudited)    (Audited)
                                                                                  -----------    ---------
<S>                                                                                <C>           <C>
Current assets:

     Cash and cash equivalents .................................................   $12,599,654   $   150,671
     Accounts receivable, net of reserves
        for doubtful accounts, returns and allowances of
        $2,928,312 at 9/30/96 and $2,717,463 at 12/31/95 .......................    12,813,962    20,396,314
     Inventories ...............................................................    18,783,073    24,173,557
     Refundable income taxes ...................................................     1,701,031          --
     Deferred income taxes .....................................................     1,513,461     1,513,461
     Prepaid expenses and other assets .........................................       321,693       221,907
                                                                                   -----------   -----------

                           Total current assets ................................    47,732,874    46,455,910

Property and equipment, net ....................................................     4,052,348     3,138,907

Other non-current assets .......................................................     1,712,917          --
                                                                                   -----------   -----------


                                                                                   $53,498,139   $49,594,817
                                                                                   ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Credit line payable .......................................................   $      --     $ 2,500,000
     Accounts payable ..........................................................     4,948,883    18,635,269
     Accrued expenses ..........................................................       998,780       948,911
     Income taxes payable ......................................................          --         236,493
                                                                                   -----------   -----------

                           Total current liabilities ...........................     5,947,663    22,320,673
                                                                                   -----------   -----------

Stockholders' equity:
     Common stock, no par value, 25,000,000 shares authorized;  7,443,204 shares
       issued and outstanding at September 30, 1996
       and 6,200,930 at December 31, 1995 ......................................    24,842,968     7,289,577
     Retained earnings .........................................................    22,707,508    19,984,567
                                                                                   -----------   -----------

                           Total stockholders' equity ..........................    47,550,476    27,274,144
                                                                                   -----------   -----------

                                                                                   $53,498,139   $49,594,817
                                                                                   ===========   ===========
</TABLE>


<PAGE>


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

<TABLE>
<CAPTION>

                                       Three Months Ending September 30,
                                       ---------------------------------
                                             1996             1995
                                             ----             ----

<S>                                       <C>             <C>
Net sales .............................   $ 20,002,140    $ 23,530,876
Costs of goods sold ...................     16,124,408      17,493,742
                                          ------------    ------------

     Gross profit .....................      3,877,732       6,037,134

Operating expenses:
     Selling ..........................      2,198,975       2,442,476
     General and administrative .......        924,131         737,494
     Research and development .........        715,242         446,900
                                          ------------    ------------

         Total operating expenses .....      3,838,348       3,626,870
                                          ------------    ------------

     Income from operations ...........         39,384       2,410,264

Other income, net .....................        144,013          31,737
                                          ------------    ------------

     Income before income taxes .......        183,397       2,442,001

Income tax expense/(benefit) ..........        (69,429)        900,000
                                          ------------    ------------

     Net income .......................   $    252,826    $  1,542,001
                                          ============    ============

Income per common and common equivalent
   share:

     Primary ..........................   $        .03    $        .25
                                          ============    ============

     Fully diluted ....................   $        .03    $        .25
                                          ============    ============

Average common and common equivalent
   shares outstanding:

     Primary ..........................      7,481,791       6,208,904
                                          ============    ============

     Fully diluted ....................      7,510,290       6,238,310
                                          ============    ============

</TABLE>




<PAGE>


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

                                    Nine Months Ending September 30,
                                    --------------------------------
                                              1996          1995
                                              ----          ----

<S>                                       <C>           <C>        
Net sales .............................   $74,378,283   $60,991,884
Costs of goods sold ...................    58,975,745    45,824,619
                                          -----------   -----------

     Gross profit .....................    15,402,538    15,167,265

Operating expenses:
     Selling ..........................     6,856,203     6,180,352
     General and administrative .......     2,621,048     1,775,582
     Research and development .........     1,945,145     1,233,468
                                          -----------   -----------

         Total operating expenses .....    11,422,396     9,189,402
                                          -----------   -----------

     Income from operations ...........     3,980,142     5,977,863

Other income, net .....................       128,070        82,031
                                          -----------   -----------

     Income before income taxes .......     4,108,212     6,059,894

Income tax expense ....................     1,385,271     2,315,000
                                          -----------   -----------

     Net income .......................   $ 2,722,941   $ 3,744,894
                                          ===========   ===========

Income per common and common equivalent
   share:

     Primary ..........................   $       .38   $       .62
                                          ===========   ===========

     Fully diluted ....................   $       .38   $       .61
                                          ===========   ===========

Average common and common equivalent
   shares outstanding:

     Primary ..........................     7,095,663     6,034,038
                                          ===========   ===========

     Fully diluted ....................     7,095,663     6,185,626
                                          ===========   ===========


</TABLE>


<PAGE>


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

                                                                    Nine Months Ending September 30,
                                                                    --------------------------------
                                                                             1996           1995
                                                                             ----           ----

<S>                                                                     <C>             <C>
Cash flows from operating activities:
     Net income .....................................................   $  2,722,941    $  3,744,894
     Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
      Depreciation and amortization .................................        429,649         184,497
      Changes in assets and liabilities:
        Accounts receivable .........................................      7,582,351      (2,234,142)
        Inventories .................................................      5,486,169      (8,969,765)
        Refundable income taxes .....................................       (116,226)           --
        Prepaid expenses and other assets ...........................       (462,375)       (427,933)
        Accounts payable and accrued expenses .......................    (13,636,515)      5,205,350
        Accrued income taxes ........................................       (236,493)           (613)
                                                                        ------------    ------------


             Net cash provided by (used in) operating activities ....      1,769,501      (2,497,712)
                                                                        ------------    ------------

Cash flows from investing activities:
      Purchase of certain assets of a business product line .........        (81,375)           --
      Additions to property, plant and equipment ....................     (1,116,800)       (891,383)
                                                                        ------------    ------------

                  Net cash used in investing activities .............     (1,198,175)       (891,383)
                                                                        ------------    ------------

Cash flows from financing activities:
      Net borrowings (repayments) under revolving bank line of credit     (2,500,000)      2,100,000
      Proceeds from the issuance of common stock ....................     11,573,218            --
      Proceeds from exercise of stock options .......................      2,804,439       1,064,700
                                                                        ------------    ------------

             Net cash provided by financing activities ..............     11,877,657       3,164,700
                                                                        ------------    ------------

Net increase (decrease) in cash and cash equivalents ................     12,448,983        (224,395)

Cash and cash equivalents, beginning of period ......................        150,671         975,400
                                                                        ------------    ------------

Cash and cash equivalents, end of period ............................   $ 12,599,654    $    751,005
                                                                        ============    ============
</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, 1995
included in the Company's 1995 Annual Report on Form 10-K.

The  consolidated  balance  sheet as of  September  30, 1996,  the  consolidated
statements of income for the three and nine months ending September 30, 1996 and
1995, and the  consolidated  statements of cash flows for the nine months ending
September 30, 1996 and 1995 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 and nine months  ending  September 30,
1996 are not necessarily indicative of the results to be expected for the entire
fiscal year ending December 31, 1996.

Certain expenses,  including employee benefit and occupancy expenses,  have been
reclassified  from  general  and  administrative  expense to cost of goods sold,
selling,  and  research  and  development  expenses in order to more  accurately
reflect the Company's cost structure.  These reclassifications have been made to
the 1995 statements in order to conform to the 1996 presentation.


(2) Inventories

<TABLE>
<CAPTION>

         Inventories consist of the following:                             9/30/96               12/31/95
         -------------------------------------                             -------               --------

<S>                                                                       <C>                   <C>         
                  Raw materials                                           $ 9,014,628           $ 13,300,407
                  Work in process                                           7,009,156              6,647,963
                  Finished goods                                            2,759.289              4,225,187
                                                                       --------------          -------------

                                                                         $ 18,783,073           $ 24,173,557
                                                                       ==============           ============
</TABLE>


(3) Secondary Stock Offering

On April 11,  1996 the  Company  sold  800,000  shares of its common  stock in a
registered  offering on a direct placement basis for proceeds of $11,573,218 net
of expenses and  underwriters  fees of $926,782.  The net proceeds  were used to
repay certain obligations of the Company.




<PAGE>



(4) Product Line Acquisition

On June 24, 1996,  the Company  issued 102,641 shares of common stock to acquire
certain assets, including inventory and property and equipment,  associated with
a product line of Tribe Computer Works,  Inc. The acquisition was recorded using
the purchase method of accounting, whereby the net assets acquired were recorded
at their estimated fair values and the excess of cost over the fair value of the
assets  acquired of $1,546,469 was allocated to goodwill and is being  amortized
over 10 years.  Transaction costs incurred to complete the acquisition  amounted
to $241,468 and are included in the total consideration  allocated to the assets
purchased, including goodwill.


(5) 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 nine months ended  September  30, 1996,  options with
respect to 339,633 shares were  exercised and such  exercises  resulted in a tax
benefit to the Company of  $1,584,805.  This  amount is  recorded as  refundable
income taxes on the balance sheet.

(6) Supplemental Disclosure of Cash Flow Information

<TABLE>
<CAPTION>

                                                                               Nine months ending September 30,

                                                                                  1996             1995
                                                                                 ------           ------

<S>                                                                              <C>           <C>       
Cash paid during the year for interest:                                          $  169,248    $       --
Cash paid during the year for income taxes:                                       1,873,000     1,210,000

</TABLE>

     Supplemental disclosure of non-cash investing and financing activities:

During the second  quarter of 1996,  the Company issued 102,641 shares of common
stock to  acquire  certain  assets  of Tribe  Computer  Works,  Inc.,  including
inventory of $95,685 and property and  equipment of $107,467.  In addition,  the
tax effect of the exercise of stock options  resulted in increases to additional
paid-in capital and an increase in refundable income taxes of $1,584,805 for the
first nine months of 1996. These non-cash  transactions  have been excluded from
the statements of cash flows.


<PAGE>



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

Results of Operations

Zoom  Telephonics,  Inc.  ("Zoom" or the "the  Company")  achieved  net sales of
$20,002,140  for its third  quarter  ending  September  30, 1996,  down 15% from
$23,530,876  in the  third  quarter  of 1995,  primarily  due to  lower  average
faxmodem  selling prices.  Net sales for the nine month period ending  September
30, 1996 grew 22% to  $74,378,283  from  $60,991,884 in the first nine months of
1995,  primarily  due to unit volume  increases  for V.34  faxmodems,  partially
offset by lower average faxmodem  selling prices.  Third quarter 1996 net income
of $252,826 or $.03 per share was down from  $1,542,001 or $.25 per share in the
third quarter of 1995, primarily due to lower sales and gross margin. Net income
for the first nine months of 1996 of  $2,722,941 or $.38 per share was down from
$3,744,894 or $.62 per share for the first nine months of 1995  primarily due to
lower  gross  margin.  Net income  decreased  to 1.3% of net sales for the third
quarter of 1996 from 6.6% of net sales for the third  quarter of 1995  primarily
due to a decline in gross  margin to 19.4% from 25.7%.  Net income for the first
nine  months  of 1996 fell to 3.7% of net  sales  from  6.2% for the first  nine
months of 1995 as gross margin declined to 20.7% from 24.9%.

Sales of branded  Zoom  products in North  America  continued to account for the
majority of net sales, despite significant gains in other markets. Worldwide OEM
sales were  19.4% of net sales in the third  quarter of 1996 up from 9.3% in the
third  quarter of 1995.  For the first nine months of 1996  worldwide  OEM sales
were  21.2% of net  sales up from  12.5%  for the  first  nine  months  of 1995.
Zoom-brand  sales  outside of North  America  were 16% of net sales in the third
quarters  of both 1996 and 1995.  For the first nine  months of 1996  Zoom-brand
sales outside of North America were 18% of net sales,  up from 15% for the first
nine months of 1995.

Gross  margin  declined to 19.4% of net sales in the third  quarter of 1996 from
25.7% in the third quarter of 1995,  reflecting an increase in lower-margin  OEM
sales and  increased  price  competition.  These factors also affected the first
nine months of 1996, as gross margin dropped from 24.9% of net sales to 20.7%.

Operating  expenses for the third quarter of 1996 rose to $3,838,348 or 19.2% of
net sales from  $3,626,870  or 15.4% of net sales in the third  quarter of 1995.
The spending  increase was primarily due to operating costs  associated with the
Tribe product line purchased in the second quarter of 1996.

Selling  and  marketing   expenses  decreased  to  $2,198,975  from  $2,442,476,
reflecting  increased  OEM  sales  and the  impact  of  lower  variable  selling
expenses,  but rose as a percentage of net sales to 11.0% from 10.4%, due to the
lower third quarter sales in 1996.  Selling and marketing expenses for the first
nine months of 1996 increased to $6,856,203  from $6,180,352 over the first nine
months of 1995;  but  declined as a  percentage  of net sales to 9.2% from 10.1%
respectively primarily due to the higher mix of OEM sales.

General and  administrative  expense  increased to $924,131 or 4.6% of net sales
from $737,494 or 3.1% of net sales,  primarily  reflecting  increased  personnel
costs.  For the first nine  months of 1996  general and  administrative  expense
increased  to  $2,621,048  or 3.5% of net sales from  $1,775,582  or 2.9% of net
sales for the first nine months of 1995.  These  increases were primarily due to
increased personnel expenses to support the Company's growth.


<PAGE>

Research and  development  expenses rose to $715,242 or 3.6% of net sales during
the  third  quarter  of 1996  from  $446,900  or 1.9% of net  sales in the third
quarter of 1995.  For the first nine months of 1996,  research  and  development
expenses rose to $1,945,145 or 2.6% of net sales from  $1,233,468 or 2.0% of net
sales for the first nine months of 1995. The increases were primarily due to the
addition of personnel to support the Company's development efforts and increased
government approvals required for international sales.

Liquidity and Capital Resources
-------------------------------

Zoom's balance sheet was strong at September 30, 1996.  Working  capital rose to
$41,785,211 from $24,135,237 on December 31, 1995, the current ratio improved to
8.0 from 2.1, and cash increased to $12,599,654 from $150,671. In addition,  the
Company has a commitment to renew a $10 million line of credit.

Operating activities provided $1,769,501 in cash during the first nine months of
1996.  The  primary  use of cash  was  the  reduction  in  accounts  payable  by
$13,636,515.  The primary generators of cash were decreased accounts  receivable
of  $7,582,351,  decreases  in  inventories  of  $5,486,169  and net  income  of
$2,722,941.  The  reduction in accounts  receivable  was  primarily due to lower
sales in the third quarter of 1996 than in the fourth quarter of 1995.

Zoom's capital  expenditures of $1,198,175  during the first nine months of 1996
reflected  purchases  of computer  equipment,  leasehold  improvements  to a new
manufacturing facility occupied in the third quarter, and continuing renovations
to its  headquarters.  In addition,  on June 24, 1996 the Company issued 102,641
shares of common stock to acquire certain assets of Tribe Computer Works,  Inc.,
including  intellectual  property,  inventory,  and property and equipment.  The
acquisition  was recorded using the purchase  method of accounting,  whereby the
net assets  acquired were recorded at their estimated fair values and the excess
of the cost  over the  fair  value of the  assets  acquired  of  $1,546,469  was
allocated to goodwill that is being amortized over 10 years.

During the first nine months of 1996 financing  activities  provided the Company
$11,877,657 of cash. The Company  realized net proceeds of $11,573,218  from the
sale of 800,000 shares of its common stock in a registered  offering on a direct
placement  basis, and proceeds of $2,804,439 from the exercise of stock options.
These  proceeds  were  offset  by  $2,500,000  of  repayments  of the  Company's
revolving line of credit.

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.




<PAGE>



"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.


ITEM 6 - Exhibits and reports on Form 8-K

      (a) Exhibit                        Description

            11                Statement of Computation of  Per Share Earnings


      (b) No reports on Form 8-K were filed by the Company during the quarter
          ending September 30, 1996



<PAGE>


                       ZOOM TELEPHONICS, INC.

                   FINANCIAL INFORMATION NOT AUDITED


The preceding  financial  information,  with the  exception of the  consolidated
balance  sheet at December  31,  1995,  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: November 14, 1996           By:    /s/ Frank Manning
                                     --------------------------
                                     Frank B. Manning, President



Date: November 14, 1996           By:    /s/ Steven T. Shedd
                                     ----------------------------
                                     Steven T. Shedd, Vice President of Finance
                                            and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)