SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q


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

          For the quarterly period ended March 31, 2004

     [ ]  TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 (No Fee Required)

                           Commission File No. 0-27210


                                   Zunicom, Inc.
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


                Texas                                   75-2408297
     -------------------------------              --------------------------
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation of organization)                 Identification No.)

                  4300 Wiley Post Road, Addison, Texas 75001
        ----------------------------------------------------------------
                   (Address of principal executive office)


                                 (972) 851-5600
                          ----------------------------
                           (Issuer's telephone number)

Check  whether  the issuer has (1) filed all  reports  required by Section 12 or
15(d) of the Exchange Act during the past 12 months, and 2) been subject to such
filing requirements for the past ninety (90) days. Yes [ X ] No [   ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes    No  X
                                               ----   ----

As of March 31, 2004, 8,451,524 shares of Common Stock were outstanding.













                                       1
<PAGE>
                                  Zunicom, Inc.
                                      INDEX

                                                                      Page
                                                                      ----
PART I - Financial Information

Item 1.  Financial Statements

Consolidated Balance Sheets at March 31, 2004 (unaudited)
and December 31, 2003. . . . . . . . . . . . . . . . . . . . . . . .   3

Consolidated Statements of Operations for the three months ended
March 31, 2004 and 2003 (unaudited). . . . . . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the three months ended
March 31, 2004 and 2003 (unaudited). . . . . . . . . . . . . . . . .   6

Notes to Consolidated Financial Statements . . . . . . . . . . . . .   7

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  14

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .   14


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  14

Item 2.  Changes in Securities, Use of Proceeds and Issuer
         Purchases of Equity Securities. . . . . . . . . . . . . . .  14

Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . .  15

Item 4.  Submission of Matters to a Vote of Securities Holders . . .  15

Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . .  15

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .  15

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . .  17











                                       2
<PAGE>
PART  I  -  FINANCIAL  INFORMATION
----------------------------------
Item  1.  Financial  Statements

                         ZUNICOM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                    (Unaudited)
                                                      March 31,    December 31,
                                                        2004          2003
                                                        ----          ----
CURRENT ASSETS
 Cash and cash equivalents                          $   329,895    $   659,350
 Accounts receivable - trade, net of
   allowance for doubtful accounts of
   $247,613 (unaudited) and $279,575                  6,497,397      6,718,931
 Accounts receivable - other                            137,311        130,194
 Inventories - finished goods, net of
   allowance for obsolescence of $716,573
   (unaudited) and $676,533                          10,197,415     10,574,381
 Prepaid expenses and other current assets              406,141        543,962
                                                     ----------    -----------
   Total current assets                              17,568,159     18,626,818
                                                    -----------    -----------
PROPERTY AND EQUIPMENT
 Facsimile and business center equipment              1,838,533      2,348,629
 Machinery and equipment                                699,879        697,130
 Computer equipment                                     242,031        237,608
 Furniture and fixtures                                 323,314        318,795
 Leasehold Improvements                                 195,998        195,998
 Vehicles                                               140,676        140,676
                                                    -----------    -----------
                                                      3,440,431      3,938,836
 Less accumulated depreciation and
   amortization                                      (2,180,569)    (2,378,885)
                                                    -----------    -----------
   Net property and equipment                         1,259,862      1,559,951
                                                    -----------    -----------
OTHER ASSETS                                             49,702         49,702
                                                    -----------    -----------
TOTAL ASSETS                                        $18,877,723    $20,236,471
                                                    ===========    ===========










            The accompanying footnotes are an integral part of these
                       consolidated financial statements.

                                       3
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS - Continued

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    (Unaudited)
                                                      March 31,    December 31,
                                                        2004          2003
                                                        ----          ----

CURRENT LIABILITIES
 Line of credit                                     $ 6,740,974    $ 5,252,310
 Current portion of notes payable -
   related party                                        860,128              -
 Current portion of long-term debt                       19,516         20,948
 Accounts payable                                     5,076,007      6,580,017
 Accrued liabilities                                    791,063      1,776,570
 Other current liabilities                                9,200          9,200
                                                    -----------    -----------
   Total current liabilities                         13,496,888     13,639,045
                                                    -----------    -----------
NOTES PAYABLE - RELATED PARTY,
   less current portion                                       -        860,128
LONG-TERM DEBT, less current portion                     36,751         42,102

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Preferred stock - $1.00 par value,
   1,000,000 shares authorized; 114,588
   Class A shares issued and outstanding;
   liquidation preference of $601,587                   114,588        114,588
 Common stock - $0.01 par value; 50,000,000
   shares authorized; 8,451,524 and
   8,419,670 shares issued and outstanding               84,515         84,197
 Additional paid-in capital                          14,482,144     14,452,841
 Accumulated deficit                                 (9,337,163)    (8,956,430)
                                                    -----------    -----------
   Total stockholders' equity                         5,344,084      5,695,196
                                                    -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $18,877,723    $20,236,471
                                                    ===========    ===========












            The accompanying footnotes are an integral part of these
                       consolidated financial statements.

                                       4
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2004 and 2003
                                   (Unaudited)
                                                       2004             2003
REVENUES                                               ----             ----
  Sales                                            $14,075,664     $12,985,031
  Service revenue                                      541,964         673,756
                                                   -----------     -----------
                                                    14,617,628      13,658,787
COST OF REVENUES
  Cost of goods sold                                12,127,767      11,018,591
  Direct servicing costs                               137,685         149,929
                                                   -----------     -----------
                                                    12,265,452      11,168,520
                                                   -----------     -----------
GROSS PROFIT                                         2,352,176       2,490,267

OPERATING EXPENSES
  Selling, general and administrative                2,240,611       1,845,232
  Depreciation and amortization of
    property and equipment                             182,783         236,115
  Write off of revenue assets                          151,157               -
                                                   -----------     -----------
                                                     2,574,551       2,081,347
                                                   -----------     -----------
INCOME (LOSS) FROM OPERATIONS                         (222,375)        408,920

OTHER EXPENSES
  Interest expense (including $48,440 and
    $76,014 to related parties)                       (141,524)       (164,968)
  Other, net                                            (5,183)         (4,256)
                                                   -----------     -----------
                                                      (146,707)       (169,224)
                                                   -----------     -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES       (369,082)        239,696

PROVISION FOR INCOME TAXES                                   -               -
                                                   -----------     -----------
NET INCOME (LOSS)                                  $  (369,082)    $   239,696
                                                   ===========     ===========
Net income (loss) attributable to
    common stockholders                            $  (380,733)    $   228,475
                                                   ===========     ===========
Net income (loss) per share attributable to
    common stockholders
    Basic                                          $     (0.05)    $      0.03
                                                   ===========     ===========
    Diluted                                        $     (0.05)    $      0.03
                                                   ===========     ===========
Number of weighted average shares of common
    stock outstanding(basic and diluted)
    Basic                                            8,445,157       8,403,390
                                                   ===========     ===========
    Diluted                                          8,445,157       8,633,566
                                                   ===========     ===========

            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                       5
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For The Three Months Ended March 31, 2004 and 2003
                                   (Unaudited)
                                                        2004            2003
                                                        ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                   $  (369,082)    $   239,696
Adjustments to reconcile net income (loss) to net
  cash provided by (used in)operating activities:
    Depreciation and amortization of property
       and equipment                                    182,783         236,115
    Provision for bad debts                              65,348          60,949
    Provision for obsolete inventory                     40,040          58,000
    Write off of revenue assets                         151,157               -
    Change in operating assets and liabilities
      Accounts receivable - trade                       156,186         179,769
      Accounts receivable - other                        (7,117)         67,817
      Inventories                                       336,926        (178,952)
      Prepaid expenses and other current assets         137,822         (16,721)
      Other assets                                            -         (14,141)
      Accounts payable                               (1,504,010)       (363,917)
      Accrued liabilities                              (985,507)         49,102
                                                    -----------     -----------
Net cash provided by (used in) operating activities  (1,795,454)        317,717
                                                    -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                  (33,852)        (60,799)
                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Net activity on line of credit                    1,488,664         (41,880)
    Proceeds from exercise of stock options              17,970               -
    Repayment of long-term debt ($0 and $199,146
      to related parties)                                (6,783)       (203,139)
    Payment of preferred stock dividends                      -         (11,221)
                                                    -----------     -----------
Net cash provided by (used in)financing activities    1,499,851        (256,240)
                                                    -----------     -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (329,455)            678

Cash and cash equivalents at beginning of period        659,350         648,415
                                                    -----------     -----------
Cash and cash equivalents at end of period          $   329,895     $   649,093
                                                    ===========     ===========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
    FINANCING ACTIVITIES

    Dividends paid through issuance of common stock $    11,651     $         -
                                                    ===========     ===========

            The accompanying footnotes are an integral part of these
                       consolidated financial statements.


                                       6
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and in  accordance  with  the  instructions  to  Form  10-Q  and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments) considered necessary for a fair presentation have been included for
the three month  period  ended March 31,  2004.  The results for the three month
period ended March 31, 2004 are not  necessarily  indicative of the results that
may be expected for the year ended December 31, 2004. The consolidated financial
statements  included  in this  filing  should  be read in  conjunction  with the
Company's  consolidated  financial  statements and notes thereto included in the
Company's annual report on form 10-K for the year ended December 31, 2003.

NOTE B - ORGANIZATION

Zunicom,  Inc.,("Zunicom"  or the "Company") was formed on January 10, 1992 as a
Texas corporation.  Zunicom's  subsidiary,  Universal Power Group  ("Universal")
has,  since its  inception in 1968,  evolved from a  distributor  of  electronic
components  into a battery,  battery  powered  products  and  security  products
distributor  and supplier,  a  third-party  fulfillment  provider,  and a custom
battery assembler. Zunicom's other subsidiary, AlphaNet Hospitality Systems Inc.
("AlphaNet"),  provides  in-room  facsimile and business  center services to the
hotel industry for their business travelers through licensing agreements.

NOTE C - STOCK BASED COMPENSATION

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance  with provisions of Accounting  Principles  Board ("APB") Opinion No.
25,  "Accounting  for Stock  Issued to  Employees."  Under APB  Opinion  No. 25,
compensation  expense for employees is based on the excess,  if any, on the date
of  grant,  between  the fair  values of the  Company's  stock  over the  option
exercise price. The Company was not required to record any compensation  expense
related to the issuance of stock options during the three months ended March 31,
2004 and 2003. Had the Company  determined  compensation based on the fair value
at the grant date for its stock  options  under  SFAS  No.123,  "Accounting  for
Stock-Based   Compensation,"  as  amended  by  SFAS  No.  148,  "Accounting  for
Stock-Based   Compensation-Transition   and  Disclosure-an   amendment  of  FASB
Statement  No. 123," net income (loss) and net income (loss) per share would not
have significantly differed from reported net income (loss).

The  Company  accounts  for  equity   instruments  issued  to  non-employees  in
accordance  with the  provisions  of SFAS No. 123 as amended by SFAS No. 148 and
Emerging  Issues Task Force  ("EITF")  Issue No. 96-18,  "Accounting  for Equity
Instruments  That Are  Issued  to Other  Than  Employees  for  Acquiring,  or in


                                       7
<PAGE>
Conjunction with Selling, Goods or Services." All transactions in which goods or
services are the consideration  received for the issuance of equity  instruments
are accounted for based on the fair value of the  consideration  received or the
fair  value  of  the  equity  instrument  issued,  whichever  is  more  reliably
measurable.  The  measurement  date of the fair value of the  equity  instrument
issued is the  earlier of the date on which the  counterparty's  performance  is
complete or the date on which it is probable that performance will occur.

NOTE D - NET INCOME PER SHARE

Basic net income  (loss) per share is computed by  dividing  net income  (loss),
decreased/increased  by the preferred stock dividends of $11,651 and $11,221 for
the three month  periods  ending  March 31, 2004 and  2003, respectively, by the
weighted average number of common shares outstanding for the period. Diluted net
income   (loss)  per  share  is   computed  by   dividing   net  income   (loss)
decreased/increased  by the preferred  stock  dividends by the weighted  average
number of common shares and common stock equivalents outstanding for the period.
The Company's  common stock  equivalents  include all common stock issuable upon
conversion of preferred stock and the exercise of outstanding  stock options and
warrants.  The aggregate  number of common stock  equivalents that were excluded
from the diluted  net income  (loss) per share  calculation  for the three month
periods   ending  March  31,  2004  and  2003  are  4,985,757   and   4,786,581,
respectively, as they are antidilutive.  For the three month period ending March
31, 2003 the dilutive  effect of 230,176  shares of common stock  issuable  upon
conversion  of the preferred  stock is included in the diluted  income per share
calculation.  Basic and  diluted  net loss per share is the same for the  period
ended March 31, 2004 as the Company incurred a net loss for the period.

NOTE E - LINE OF CREDIT

Universal has a $12,000,000 line of credit with a financing company,  payable on
demand, with interest payable monthly at the lender's prime plus 1.25%, maturing
March 2005.  The line of credit is secured by accounts  receivable,  inventories
and  equipment of  Universal.  The line's  availability  is based on a borrowing
formula  which  allows  for  borrowings  equal  to 85% of  Universal's  eligible
accounts receivable and a percentage of eligible  inventory.  On March 31, 2004,
$6,740,974  of the line of  credit  was  outstanding,  while  $746,809  remained
available  for  borrowings  under the line. As of March 31, 2004 the Company was
not in  compliance  with a certain  financial  covenant  related to fixed charge
coverage ratio calculations and has received a waiver from the financing company
for March 31, 2004.

NOTE F - NOTES PAYABLE - RELATED PARTY

AlphaNet has two notes payable to related party financing companies. One note in
the original  principal  amount of $1,525,000  is payable to Appel  Investments,
Inc. of which Kim Yeow Tan, William Tan's brother,  is an officer,  director and
shareholder.  As of March 31, 2004,  AlphaNet owes $550,257 in principal on this
note. The second note in the original  principal amount of $1,000,000 is payable
to AHS Funding LLC of which  Jenny  Jechart,  a  shareholder,  is the  principal
shareholder.  As of March 31, 2004,  AlphaNet owes $309,871 in principal on this
note.  These  notes,  which  have  interest  rates of  20.5%,  payable  monthly,
originally matured on October 21, 2001 and have been extended to March 27, 2005.
These notes are secured by a first lien on all AlphaNet assets and a second lien
on all AlphaNet stock owned by Zunicom and are guaranteed by Zunicom.

                                       8
<PAGE>
NOTE G - SEGMENTS

The battery and fulfillment segment represents the operations of Universal.  The
facsimile and business  center  segment  represents  the operations of AlphaNet.
These segments were  identified  based on the different  nature of the services,
location, and, in general, the type of customers.

A summary of the segment financial  information  reported to the chief operating
decision maker is as follows:

                        Three Months Ended March 31, 2004

                                            Facsimile
                                            and
                                Battery and Business
                                Fulfillment Center      Adjustment  Consolidated
                                ----------- ----------  ----------  ------------
Revenue                         $14,075,664 $  541,964  $       -   $14,617,628
Depreciation and amortization        29,403    152,915        465       182,783
Segment profit (loss)                43,272   (274,351)  (138,003)     (369,082)
Segment assets                   17,471,042  1,232,128    174,553    18,877,723
Capital expenditures by segment       7,269     26,583          -        33,852


                        Three Months Ended March 31, 2003

                                            Facsimile
                                            and
                                Battery and Business
                                Fulfillment Center      Adjustment  Consolidated
                                ----------- ----------  ----------  ------------
Revenue                         $12,985,031 $  673,756  $       -   $13,658,787
Depreciation and amortization        27,320    207,267      1,528       236,115
Segment profit (loss)               421,027    (84,318)   (97,013)      239,696
Segment assets                   15,611,489  2,827,091     58,541    18,497,121
Capital expenditures by segment      11,470     49,329          -        60,799

The adjustments  represent  depreciation and  amortization  related to corporate
assets,  corporate  expenses,  and corporate  capital  expenditures to reconcile
segment balances to consolidated balances.

NOTE H - CONCENTRATIONS

A  significant  portion  of  Universal's  business  is with one major  customer,
Brink's Home Security,  which  represented  approximately  61%, of the Company's
first quarter 2004 revenue. At March 31, 2004,  Universal had aggregate accounts
receivable  from this customer in the amount of $2,897,638.  Through the date of
this report, substantially this entire amount has been collected.

NOTE I - SHAREHOLDERS' EQUITY

During the three  months ended March 31,  2004,  the Company  paid  dividends of
$11,651 on the Series A Preferred  Stock through the issuance of 6,854 shares of
the Company's  common stock.  Also during the three months ended March 31, 2004,
25,000 shares of the Company's  common stock were issued pursuant to an employee
exercise of stock options.


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<PAGE>
NOTE J - WRITE OFF OF REVENUE ASSETS

The Company wrote off certain revenue  assets,  primarily  facsimile  equipment,
which  were  taken out of  service  and are no longer in use,  and  accordingly,
recognized  impairment charges totaling  $151,157.  The charges are presented as
write off of  revenue  assets in the  accompanying  consolidated  statements  of
operations.


















































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<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The  following  discussion  and  analysis  should  be read in  conjunction  with
Zunicom's Consolidated Financial Statements and notes thereto included elsewhere
in this Form 10-Q. Except for the historical  information  contained herein, the
discussion in this Form 10-Q contains  certain forward  looking  statements that
involve  risks  and  uncertainties,  such  as  statements  of  Zunicom's  plans,
objectives,  expectations and intentions. The cautionary statements made in this
Form 10-Q  should be read as being  applicable  to all  related  forward-looking
statements  wherever they appear in this Form 10-Q.  These  statements  include,
without limitation,  statements  concerning the potential operations and results
of the Company described below. Zunicom's actual results could differ materially
from these  discussed  here.  Factors  that could  cause or  contribute  to such
differences include,  without limitation,  those factors discussed herein and in
Zunicom's Annual Report on Form 10-K for the year ended December 31, 2003.

RESULTS OF OPERATIONS

Currently, the operations of Zunicom are conducted through its two subsidiaries,
Universal and AlphaNet.

REVENUES

For the three month  period  ended  March 31,  2004,  Zunicom  had  consolidated
revenues of $14,617,628  compared to $13,658,787 for the similar period in 2003,
an increase of $958,841 or 7%.

Universal  and AlphaNet had revenues of  $14,075,664  and $541,964 for the three
month  period  ended  March 31,  2004,  respectively,  compared  to  revenues of
$12,985,031 and $673,756 for the similar period in 2003.

The $1,090,633  increase in Universal's  revenues is primarily  attributable  to
revenues  from  a  third  party  fulfillment  customer,  Brink's  Home  Security
("Brinks"),  Universal's  largest  customer,  which offset a decline in sales of
battery,  battery related and battery powered products of $766,241 primarily due
to decreased  ordering from medical supply  customers  attributable  to changing
Medicare practices.  Specifically, Brinks sales totaled $8,621,149 for the three
month period ended March 31, 2004 and were $6,764,275 for the three month period
ended March 31,  2003.  We do not  believe the slow down in orders from  medical
supply customers will continue throughout the next quarters.

AlphaNet's  decrease in revenues of $131,792 is  attributable  to the  continued
decline in facsimile  usage by hotel guests,  service fees charged to hotels for
renewal of  expired  contracts,  as well as  declining  installations  of InnFax
machines.  However,  AlphaNet's  decrease in facsimile revenues of approximately
$234,464 has been partially  offset by the increase usage and  installations  of
"The Office" product in hotels of $102,672.

COST OF REVENUES

For the three month period ended March 31, 2004, Zunicom's  consolidated cost of
revenues  increased to  $12,265,452  compared to cost of revenues of $11,168,520
for the similar period in 2003, an increase of $1,096,932 or 9.8%.



                                       11
<PAGE>
Universal's and AlphaNet's cost of revenues totaled $12,127,767 and $137,685 for
the  three  month  period  ended  March  31,  2004,  respectively,  compared  to
$11,018,591 and $149,929 during the similar period in 2003, respectively.

Increased  revenues at  Universal  during the three month period ended March 31,
2004  compared  to the  similar  period in 2003,  resulted in an increase in the
related  cost of  revenues.  Cost of revenues as a  percentage  of revenues  for
Universal  increased to 86% compared to 85% for the similar period in 2003. This
increase  is mainly  attributable  to the lower  margins  earned on third  party
fulfillment  services to Brinks.  The gross  margins for the three month  period
ended March 31, 2004 from fulfillment services for Brinks were approximately 10%
compared to average gross margins of 20% from sales to other customers.

AlphaNet's direct servicing costs as a percentage of service revenues  increased
to 25% for the three month period  ending March 31, 2004 compared to 22% for the
same period in 2003. The increase is primarily  attributable to the fewer number
of facsimile  machines  installed at hotels,  a decrease in recurring  facsimile
services,  and increased  reserves for facsimile  inventories as a result of the
continuing decline in service revenues.

OPERATING EXPENSES

For the  three  month  period  ended  March  31,  2004,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
as well as  depreciation  and  amortization  and  impairments  of  property  and
equipment  increased to $2,574,551 compared to $2,081,347 for the similar period
in 2003, an increase of $493,204 or 16%.

The operating expenses of Universal,  AlphaNet,  and Zunicom totaled $1,810,516,
$626,810  and $137,225  respectively  for the three month period ended March 31,
2004,  compared to  $1,467,460,  $530,033 and $83,854 for the similar  period in
2003, respectively.

The  increase in  Universal's  operating  expenses in 2004 is  primarily  due to
increases in bonus accruals,  wages,  consulting and related travel of $199,000,
increased  participation  in trade  shows  and  related  marketing  of  $44,000,
increases in rent and related  property taxes of $40,000 and increases in legal,
accounting and related services of $60,000.  Trade shows and accounting fees are
consistently  heavier in the first  quarter of each year and are not expected to
continue at the same rate in subsequent quarters.

The increase in AlphaNet's  operating expenses is primarily  attributable to the
write down of certain revenue assets that were taken out of service.

The  increase in  Zunicom's  operating  expenses is  primarily  due to increased
salaries and bonuses for the three month period  ending March 31, 2004  compared
to the same period in 2003.

INTEREST EXPENSE

Zunicom's  consolidated interest expense was $141,524 for the three month period
ended March 31, 2004  compared to  $164,968  for the similar  period in 2003,  a
decrease  of  $23,444.  The  decrease in  interest  expense is  attributable  to
payments made by AlphaNet on  outstanding  debt.  The decrease in AlphaNet notes
payable at interest rates of 20.5% is partially  offset by increased  borrowings


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<PAGE>
on the  Universal  line of credit,  which has an interest  rate of the  lender's
prime plus 1.25% (5.5% at March 31, 2004).

LIQUIDITY

Zunicom,  on a consolidated basis, had cash and cash equivalents of $329,895 and
$649,093 at March 31, 2004 and 2003, respectively.

Net cash used in  operations  was  $1,795,454  for the three month  period ended
March 31, 2004  compared  to cash  provided by  operations  of $317,717  for the
similar  period  in 2003.  The cash  used in  operating  activities  in 2004 was
primarily  related to net losses of $369,082 and reductions in accounts  payable
and accrued  liabilities  of  $1,504,010  and $985,507  respectively,  partially
offset by changes in receivables,  inventory,  depreciation and amortization and
the write off of revenue  assets.  The cash provided by operating  activities in
2003  was  primarily  related  to  net  income  of  $239,696,  depreciation  and
amortization  of $236,115,  and  provisions  for  inventory and  receivables  of
$118,949  offset by a decrease in accounts  payable of $363,917,  and offsetting
changes is receivables and inventory.

Net cash used by investing activities for the three month period ended March 31,
2004,  was $33,852  compared to $60,799 for the similar period in 2003. The cash
used in 2004 and 2003 was related to the purchase of property and equipment.

Net cash provided by financing activities for the three month period ended March
31,  2003 was  $1,499,851  compared  to cash  used in  financing  activities  of
$256,240  for the similar  period in 2003.  The net cash  provided by  financing
activities  for 2004 was primarily  comprised of net borrowings on the Universal
line of  credit,  while  the  cash  used in  financing  activities  in 2003  was
primarily related to repayments on long term debt.

AlphaNet has two notes payable to related party financing companies. One note in
the original  principal  amount of $1,525,000  is payable to Appel  Investments,
Inc. of which Kim Yeow Tan, William Tan's brother,  is an officer,  director and
shareholder.  As of March 31, 2004,  AlphaNet owes $550,257 in principal on this
note. The second note in the original  principal amount of $1,000,000 is payable
to AHS Funding LLC of which  Jenny  Jechart,  a  shareholder,  is the  principal
shareholder.  As of March 31, 2004,  AlphaNet owes $309,871 in principal on this
note.  These notes,  which have interest rates of 20.5%,  originally  matured on
October 21, 2001 and were extended to March 27, 2005. These notes are secured by
a first lien on all  AlphaNet  assets and a second  lien on all  AlphaNet  stock
owned by Zunicom and are guaranteed by Zunicom.

As provided for in the Universal line of credit agreement discussed in Note E in
the interim financial statements found elsewhere in this report,  Universal may,
under certain conditions, borrow under the line to upstream funds to Zunicom, to
pay this indebtedness.  Assuming borrowing availability and certain fixed charge
coverage ratio tests are met. Universal may borrow for this purpose up to 50% of
its net  income  quarterly  until the notes are  retired.  As of March 31,  2004
Universal did not meet the fixed charge  coverage  ratio,  has received a waiver
from the lending  institution,  and did not upstream  funds in the quarter ended
March 31, 2004

Zunicom  believes that cash provided by its operations and cash available  under
the Universal line of credit will be sufficient to meets its  operational  needs


                                       13

<PAGE>
over the next year.  However,  it may not be  sufficient to retire the Appel and
AHS Funding  indebtedness.  Zunicom continues to search for replacement  lenders
for the Appel and AHS notes  but to date  has been unable to secure  alternative
financing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk due to changes in U.S.  interest  rates. We do not
engage in financial  transactions for trading or speculative purposes. We have a
$12  million  line of credit.  Amounts  borrowed  under the line of credit  bear
interest based on prime rate plus 1.25%.  Borrowings  under this credit facility
were  $6.7  million  as of March  31,  2004.  An  increase  of 10% to 20% in the
interest  paid  for the  line of credit would not have a material  effect on our
operating  results.   We  do  not  manage the risk through the use of derivative
instruments.

Since the majority of goods that Universal purchases are from Asia, and AlphaNet
conducts business in Canada, we have market risk arising from changes in foreign
currency exchange rates. At this time, we do not manage the risk through the use
of derivative  instruments as Universal  negotiates its purchases in US Dollars.
Therefore, a 10% adverse exchange-rate  fluctuation would not have a significant
short term impact on our results of operations or financial position.

ITEM 4. CONTROLS AND PROCEDURES

We  have  carried  out  an  evaluation,  under  the  supervision  and  with  the
participation  of  our  principal  executive  officer  and  principal  financial
officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures as of March 31, 2004,  pursuant to Rule 13a-15(b)  under
the Exchange Act. Based on this evaluation,  our principal executive officer and
principal   financial  officer  concluded  that  our  disclosure   controls  and
procedures are effective in ensuring that  information  required to be disclosed
is recorded, processed, summarized and reported in a timely manner.

We  have  carried  out  an  evaluation   under  the  supervision  and  with  the
participation  of  our  principal  executive  officer  and  principal  financial
officer,  of any changes in our internal controls over financial  reporting that
have  occurred  during  the three month period  ended  March 31,  2004,  and our
principal  executive officer and principal financial officer have concluded that
there was  no change  during the three  months  ended  March 31,  2004  that has
materially  affected or is reasonably expected to materially affect our internal
control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Changes in Securities,  Use of  Proceeds and Issuer Purchases of  Equity
Securities.

None.




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<PAGE>
Item 3. Defaults upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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

a.      The following exhibits are filed as part of this report or incorporated
        herein as indicated.

        31.1 Certification related to Quarterly Report Form 10-Q disclosures.

        31.2 Certification related to Quarterly Report Form 10-Q disclosures

        32.1 Certification pursuant to Rule 13a-14(b) of the Exchange Act and 18
             U.S.C.  Section  1350,  as enacted  pursuant  to Section 906 of the
             Sarbanes-Oxley Act of 2002.

        32.2 Certification pursuant to Rule 13a-14(b) of the Exchange Act and
             18 U.S.C.  Section 1350,  as enacted pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002.

b.      The following reports on Form 8-K were filed or required to be filed for
        the last quarter.

           None.
























                                       15
<PAGE>
                                    Signature
                                    ---------

     In accordance with Section 13 or 15(d) of the Securities  Exchange Act, the
Company has caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.



                                       Zunicom, Inc.
                                       -----------------------------


Date:  May 17, 2004                    /s/ Julie Sansom-Reese
                                       --------------------------------
                                       Julie Sansom-Reese
                                       Chief Financial Officer
                                       (principal financial officer)







































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