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 June 30, 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.)

                  1720 Hayden Road Carrollton, TX 75006
        ----------------------------------------------------------------
                   (Address of principal executive office)


                                 (469) 892-1122
                          ----------------------------
                           (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 June 30, 2004, 8,461,837 shares of Common Stock were outstanding.











                                       1
<PAGE>
                                  Zunicom, Inc.
                                      INDEX

                                                                      Page
                                                                      ----
PART I - Financial Information

Item 1.  Financial Statements

Consolidated Balance Sheets at June 30, 2004 (unaudited)
and December 31, 2003. . . . . . . . . . . . . . . . . . . . . . . .   3

Consolidated Statements of Operations for the three and six months
ended June 30, 2004 and 2003 (unaudited) . . . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the six months ended
June 30, 2004 and 2003 (unaudited). . . . . . . . . . . . . . . . .    7

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

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .  12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  17

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .   17


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  17

Item 2.  Changes in Securities, Use of Proceeds and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . .  17

Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . .  18

Item 4.  Submission of Matters to a Vote of Securities Holders . . .  18

Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . .  18

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .  18

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . .  20











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

                         ZUNICOM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                (Unaudited)
                                                  June 30,       December 31,
                                                    2004             2003
                                                    ----             ----
CURRENT ASSETS
  Cash and cash equivalents                    $    767,312      $    659,350
  Accounts receivable - trade, net of
     allowance for doubtful accounts of
     $236,375 (unaudited) and $279,579            7,583,122         6,718,931
  Accounts receivable - other                        79,282           130,194
  Inventories - finished goods, net of
     allowance for obsolescence of
     $731,573 (unaudited) and $676,533           10,728,512        10,574,381
  Prepaid expenses and other current assets         537,872           543,962
                                               ------------      ------------
        Total current assets                     19,696,100        18,626,818
                                               ------------      ------------
PROPERTY AND EQUIPMENT
  Facsimile and business center equipment         1,025,141         2,348,629
  Machinery and equipment                           699,879           697,130
  Computer equipment                                240,573           237,608
  Furniture and fixtures                            356,724           318,795
  Leasehold Improvements                            219,180           195,998
  Vehicles                                          140,676           140,676
                                               ------------      ------------
                                                  2,682,173         3,938,836
  Less accumulated depreciation and
     amortization                                (1,865,207)       (2,378,885)
                                               ------------      ------------
        Net property and equipment                  816,966         1,559,951
                                               ------------      ------------
OTHER ASSETS                                         49,702            49,702
                                               ------------      ------------
TOTAL ASSETS                                   $ 20,562,768      $ 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)
                                                  June 30,       December 31,
                                                    2004             2003
                                                    ----             ----

CURRENT LIABILITIES
  Line of credit                               $  6,852,331      $  5,252,310
  Current portion of notes payable - related
     party                                          860,128                 -
  Current portion of long-term debt                  17,328            20,948
  Accounts payable                                6,642,186         6,580,017
  Accrued liabilities                             1,174,785         1,776,570
  Other current liabilities                           9,200             9,200
                                               ------------      ------------
     Total current liabilities                   15,555,958        13,639,045
                                               ------------      ------------
NOTES PAYABLE - RELATED PARTY, less current
     portion                                              -           860,128
LONG-TERM DEBT, less current portion                 33,524            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; 8,461,837 and
     8,419,670 shares issued and outstanding         84,618            84,197
  Additional paid-in capital                     14,491,838        14,452,841
  Accumulated deficit                            (9,717,758)       (8,956,430)
                                               ------------      ------------
     Total stockholders' equity                   4,973,286         5,695,196
                                               ------------      ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 20,562,768      $ 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 and Six Months Ended June 30, 2004 and 2003
                                   (Unaudited)
<TABLE>
<S>                                   <C>          <C>           <C>          <C>
                                      For the three months ended  For the six months ended
                                      -------------------------- ---------------------------
                                                June 30,                  June 30,
                                                --------                  --------
                                           2004         2003          2004        2003
                                           ----         ----          ----        ----
REVENUES
  Sales                               $ 16,167,901 $ 13,770,892  $ 30,243,565 $ 26,755,923
  Service revenue                          524,433      696,035     1,066,397    1,369,791
                                      ------------ ------------  ------------ ------------
                                        16,692,334   14,466,927    31,309,962   28,125,714
COST OF REVENUES
  Cost of goods sold                    14,138,271   11,511,573    26,266,038   22,530,164
  Direct servicing costs                   125,318      226,707       263,003      376,636
                                      ------------ ------------  ------------ ------------
                                        14,263,589   11,738,280    26,529,041   22,906,800
                                      ------------ ------------  ------------ ------------
GROSS PROFIT                             2,428,745    2,728,647     4,780,921    5,218,914

OPERATING EXPENSES
  Selling, general and administrative    2,136,108    2,012,549     4,376,719    3,857,781
  Depreciation and amortization of
     property and equipment                147,201      254,678       329,984      490,793
  Write off of property and equipment      356,833            -       507,990            -
                                      ------------ ------------  ------------ ------------
                                         2,640,142    2,267,227     5,214,693    4,348,574
                                      ------------ ------------  ------------ ------------
INCOME (LOSS) FROM OPERATIONS             (211,397)     461,420      (433,772)     870,340

OTHER EXPENSES
  Interest expense (including $39,173,
     $90,947, $87,613 and $166,961 to
     related parties)                     (151,640)    (163,541)     (293,164)    (328,509)
  Other, net                                (7,761)     139,702       (12,944)     135,446
                                      ------------ ------------  ------------ ------------
                                          (159,401)     (23,839)     (306,108)    (193,063)
                                      ------------ ------------  ------------ ------------
INCOME (LOSS) BEFORE PROVISION FOR
     INCOME TAXES                         (370,798)     437,581      (739,880)     677,277

PROVISION FOR INCOME TAXES                       -            -             -            -
                                      ------------ ------------  ------------ ------------
</TABLE>








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




                                       5

<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             For the Three and Six Months Ended June 30, 2004 and 2003
                                   (Unaudited)
                                   (continued)
<TABLE>
<S>                                   <C>          <C>           <C>          <C>
                                      For the three months ended  For the six months ended
                                      -------------------------- ---------------------------
                                                June 30,                  June 30,
                                                --------                  --------
                                           2004         2003          2004        2003
                                           ----         ----          ----        ----

NET INCOME (LOSS)                     $   (370,798)$    437,581  $   (739,880)$    677,277
                                      ============ ============  ============ ============
Net income (loss) attributable to
     common stockholders              $   (380,595)$    427,223  $   (761,328)$    655,698
                                      ============ ============  ============ ============
Net income (loss) per share
     attributable to common
     stockholders
     Basic                            $      (0.04)$       0.05  $      (0.09)$       0.08
                                      ============ ============  ============ ============
     Diluted                          $      (0.05)$       0.05  $      (0.09)$       0.08
                                      ============ ============  ============ ============
Number of weighted average shares
     of common stock outstanding

     Basic                               8,454,924    8,403,390     8,450,041    8,403,390
                                      ============ ============  ============ ============
     Diluted                             8,454,924    8,633,566     8,450,041    8,633,566
                                      ============ ============  ============ ============
</TABLE>











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













                                       6
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For The Six months ended June 30, 2004 and 2003
                                   (Unaudited)
                                                       2004            2003
                                                       ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                  $  (739,880)   $    677,277
Adjustments to reconcile net income (loss)
  to net cash provided by (used in)operating
  activities:
    Depreciation and amortization of property
      and equipment                                    329,984         490,793
    Provision for bad debts                            134,907         133,237
    Provision for obsolete inventory                    55,040         103,500
    Write off of property and equipment                507,990               -
    Change in operating assets and liabilities
      Accounts receivable - trade                     (999,098)       (347,874)
      Accounts receivable - other                       50,912         100,394
      Inventories                                     (209,171)      1,423,499
      Prepaid expenses and other current assets          6,090        (101,064)
      Other assets                                           -         (15,899)
      Accounts payable                                  62,169      (1,461,178)
      Accrued liabilities                             (601,785)        356,495
                                                   -----------    ------------
Net cash provided by (used in) operating activities (1,402,842)      1,359,180
                                                   -----------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                 (94,989)        (87,202)
                                                   -----------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Net activity on line of credit                   1,600,021      (1,111,715)
    Proceeds from exercise of stock options             17,970               -
    Repayment of long-term debt ($0 and
      $385,146 to related parties)                     (12,198)       (392,414)
    Payment of preferred stock dividends                     -         (21,579)
                                                   -----------    ------------
Net cash provided by (used in) financing activities  1,605,793      (1,525,708)
                                                   -----------    ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   107,962        (253,730)

Cash and cash equivalents at beginning of period       659,350         648,415
                                                   -----------    ------------
Cash and cash equivalents at end of period         $   767,312    $    394,685
                                                   ===========    ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
     AND FINANCING ACTIVITIES
    Preferred stock dividends paid
      through issuance of common stock             $    21,448    $          -
                                                   ===========    ============
    Acquisition of property and equipment
      through capital lease                        $         -    $     21,244
                                                   ===========    ============
            The accompanying footnotes are an integral part of these
                       consolidated financial statements.


                                       7
<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
all periods  presented.  The results for the three and six month  periods  ended
June 30, 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 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 stock  options  granted to  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 periods
ended June 30, 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)  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
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

                                       8
<PAGE>
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 $9,797 and $10,358 for
the three month periods ending June 30, 2004 and 2003, respectively, and $21,448
and $21,579 for the six months ending June 30, 2004 and 2003,  respectively,  by
the weighted average number of common shares outstanding for the period. Diluted
net income per share for the three and six months periods ended June 30, 2003 is
computed by dividing net income  decreased 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 loss per share  calculation
for the three and six month periods ending June 30, 2004 total 4,985,757 as they
are anti-dilutive.  For the three and six month periods ending June 30, 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 three and six month
periods  ended  June 30,  2004 as the  Company  incurred  a net  loss for  these
periods.

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 June 30, 2004,
$6,852,331  of the line of credit was  outstanding,  while  $1,785,615  remained
available for borrowings under the line.

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 is an officer, director and shareholder. William Tan,
Zunicom's  President  and CEO, is Kim Yeow Tan's  brother.  As of June 30, 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 June 30, 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.






                                       9
<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:

                                Six months ended June 30, 2004
                                ------------------------------
                                    Facsimile
                                    and
                      Battery and   Business
                      Fulfillment   Center       Adjustment   Consolidated
                      -----------   ---------    ----------   ------------
Revenue               $30,243,565  $ 1,066,397   $        -    $31,309,962
Depreciation and
   amortization            58,110      270,943          931        329,984
Segment profit (loss)     263,005     (734,003)    (268,882)      (739,880)
Segment assets         19,642,374      729,341      191,053     20,562,768
Capital expenditures
   by segment              63,860       31,129            -         94,989


                                Six months ended June 30, 2003
                                ------------------------------
                                    Facsimile
                                    and
                      Battery and   Business
                      Fulfillment   Center       Adjustment   Consolidated
                      -----------   ------       ----------   ------------
Revenue               $26,755,923   $ 1,369,791  $        -    $28,125,714
Depreciation and
   amortization            55,796       432,030       2,967        490,793
Segment profit (loss)     949,179      (109,133)   (162,769)       677,277
Segment assets         14,284,916     2,552,169      59,525     16,896,610
Capital expenditures
   by segment              44,313        64,133           -        108,446



The adjustments  represent  depreciation and  amortization  related to corporate
assets,  corporate expenses,  and corporate assets 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 Universal's year
to date 2004  revenue and 58% of  Zunicom's  year to date  revenue.  At June 30,
2004,  Universal had  aggregate  accounts  receivable  from this customer in the
amount of $3,195,075. Through the date of this report, substantially all of this
amount has been collected.


                                       10
<PAGE>
NOTE I - SHAREHOLDERS' EQUITY

During the six months ended June 30, 2004, the Company paid dividends of $21,448
on the Series A Preferred  Stock  through the  issuance of 17,167  shares of the
Company's common stock.  Also during the six months ended June 30, 2004,  25,000
shares of the  Company's  common  stock  were  issued  pursuant  to an  employee
exercise of stock options.

NOTE J - WRITE OFF OF PROPERTY AND EQUIPMENT

The Company  wrote off  certain  property  and  equipment,  primarily  facsimile
equipment,  which  was  taken  out of  service  and is no  longer  in  use,  and
accordingly,  recognized  impairment  charges  totaling  $507,990 during the six
months  ended June 30,  2004.  The charges  represent  the net book value of the
assets  and  are  presented  as  write  off of  property  and  equipment  in the
accompanying consolidated statements of operations.









































                                       11
<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

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

RECENT DEVELOPMENTS

On June 29, 2004  Universal  entered  into a contract  renewal with it's largest
customer,  Brink's Home Security  ("Brinks"),  for a two year period followed by
successive  one-year  renewals,  effective  June 1, 2004.  Under the  agreement,
Universal will continue to provide  Brinks with  logistical  services  including
product procurement, warehousing, fulfillment and distribution.

REVENUES

THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO JUNE 30, 2003

For the three  month  period  ended  June 30,  2004,  Zunicom  had  consolidated
revenues of $16,692,334  compared to $14,466,927 for the similar period in 2003,
an increase of $2,225,407 or 15%.

Universal had revenues of $16,167,901  for the three month period ended June 30,
2004,  compared to revenues of $13,770,892 for the similar period in 2003, or an
increase of 17%.  AlphaNet  had  revenues of $524,433 for the three month period
ended June 30, 2004  compared to revenues of $696,035 for the similar  period in
2003, or a decrease of 27%.

The $2,397,009  increase in Universal's  revenues is primarily  attributable  to
increased revenues from Brinks. In addition,  sales of battery,  battery related
and battery powered  products  increased  $415,210 over the previous year due to
increased ordering of several newly introduced items. Specifically, Brinks sales
totaled $9,687,209 for the three month period ended June 30, 2004 and $7,705,410
for the three month period ended June 30, 2003.  We anticipate  continued  sales
increases in the battery,  battery  related and battery powered product line due
to the  introduction  of several new  products  which have been  initially  well
received.




                                       12
<PAGE>
AlphaNet's  decrease in revenues of $171,602 is  attributable  to the  continued
decrease in usage of the InnFax product due to changing consumer preferences and
de-installations from hotel properties partially offset by usage of "The Office"
product.  We  expect  continued  deterioration  of the  InnFax  revenues,  being
partially, if not completely, replaced by "The Office" revenues.

COST OF REVENUES

For the three month period ended June 30, 2004,  Zunicom's  consolidated cost of
revenues  increased to  $14,263,589  compared to cost of revenues of $11,738,280
for the similar period in 2003, an increase of $2,525,309 or 22%.

Universal's  cost of revenues  totaled  $14,138,271  for the three month  period
ended June 30, 2004,  compared to  $11,511,573,  or an increase of $2,626,698 or
23% in the similar period in 2003.  AlphaNet's cost of revenues totaled $125,318
for the three month period ended June 30, 2004  compared to $226,707  during the
similar period last year, a decrease of $101,389 or 45%.

Cost of revenues as a  percentage  of revenues  for  Universal  increased to 87%
compared  to 84% for the  similar  period  in  2003.  This  increase  is  mainly
attributable to the lower margins earned on third party fulfillment  services to
Brinks as well as cost increases  from suppliers and freight  handlers that were
not passed on to the customer. The gross margin for the three month period ended
June 30,  2004 from  fulfillment  services  for  Brinks  was  approximately  10%
compared to average gross margin of 17% from sales to other customers. Universal
is examining  customer  pricing based upon the product cost increases  which are
expected to continue in the near future.

AlphaNet's direct servicing costs as a percentage of service revenues  decreased
to 24% for the three month period  ending June 30, 2004  compared to 33% for the
same  period in 2003.  The  decrease  is  primarily  attributable  to  inventory
reserves  taken in 2003 relating to InnFax  product that has  subsequently  been
written off.

OPERATING EXPENSES

For the three month period ended June 30, 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 $2,640,142  compared to $2,267,227  for the similar period in 2003,
an increase of $372,915 or 16%.

The  operating  expenses of  Universal  totaled  $1,707,775  for the three month
period ended June 30, 2004,  compared to  $1,649,042  for the similar  period in
2003 and increase of 4%. On the same basis  AlphaNet's  operating  expenses were
$809,363  compared to  $562,056,  and  increase of 44% and  Zunicom's  operating
expenses  were  $123,004  compared to $56,128,  and  increase of 119%.  AlphaNet
recorded a write down of assets of $356,833  for the three months ended June 30,
2004 related to the disposal and  impairment of certain  InnFax and "The Office"
assets.

The  increase in  Universal's  operating  expenses in 2004 is  primarily  due to
increases in  consulting  and  marketing  of $102,000  offset by  reductions  in
property tax and bonus accruals of approximately $44,000.



                                       13
<PAGE>
The increase in AlphaNet's  operating expenses is attributable to the write down
of certain assets of $356,833  substantially offset by decreases in depreciation
expense.

The increase in  Zunicom's  operating  expenses of $66,876 is  primarily  due to
increased  salaries,  investor  relation services and travel for the three month
period ending June 30, 2004 compared to the same period in 2003.

INTEREST EXPENSE

Zunicom's  consolidated interest expense was $151,640 for the three month period
ended June 30,  2004  compared to $163,541  for the  similar  period in 2003,  a
decrease of $11,903. The decrease in AlphaNet notes payable at interest rates of
20.5% is  partially  offset by increased  borrowings  on the  Universal  line of
credit,  which has an interest  rate of the lender's  prime plus 1.25% (5.25% at
June 30, 2004).

SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO JUNE 30, 2003

For the six month period ended June 30, 2004, Zunicom had consolidated  revenues
of  $31,309,962  compared  to  $28,125,714  for the similar  period in 2003,  an
increase of $3,184,248 or 11%.

Universal  had revenues of  $30,243,565  for the six month period ended June 30,
2004,  compared  to  revenues of  $26,755,923  for the  similar  period in 2003.
AlphaNet  had  revenues of  $1,066,397  for the six month  period ended June 30,
2004, compared to revenues of $1,369,791 for the similar period in 2003.

The $3,487,642  increase in Universal's  revenues is primarily  attributable  to
revenues from Brinks which offset a decline in sales of battery, battery related
and battery  powered  products of $351,031  primarily due to decreased  ordering
from medical supply  customers  during the first quarter of 2004.  Specifically,
Brinks sales  totaled  $18,308,358  for the six month period ended June 30, 2004
and were $14,469,685 for the six month period ended June 30, 2003.

AlphaNet's  decrease in revenues of $303,394 is  attributable  to the  continued
decline in  facsimile  usage due to product  removal from hotel  properties  and
changing consumer preferences which has been partially offset by the increase in
usage of "The Office" products.

COST OF REVENUES

For the six month  period ended June 30, 2004,  Zunicom's  consolidated  cost of
revenues  increased to  $26,529,041  compared to cost of revenues of $22,906,800
for the similar period in 2003, an increase of $3,622,241 or 16%.

Universal's cost of revenues totaled  $26,266,038 for the six month period ended
June 30,  2004,  compared  to  $22,530,164  during the  similar  period in 2003.
AlphaNet's cost of revenues totaled $263,003 for the six month period ended June
30, 2004 compared to $376,636 during the similar period in 2003.







                                       14
<PAGE>
Cost of revenues as a  percentage  of revenues  for  Universal  increased to 87%
compared  to 84% for the  similar  period  in  2003.  This  increase  is  mainly
attributable to the lower margins earned on third party fulfillment  services to
Brinks and increased  cost of product from  overseas  suppliers not passed on to
the  customer.  The gross  margins for the six month  period ended June 30, 2004
from fulfillment  services for Brinks were approximately 10% compared to average
gross  margins  of 18% from sales to other  customers.  Universal  is  examining
customer  pricing  based upon the product cost  increases  which are expected to
continue in the near future.

AlphaNet's direct servicing costs as a percentage of service revenues  decreased
to 25% for the six month  period  ending June 30,  2004  compared to 27% for the
same  period in 2003.  The  decrease  is  primarily  attributable  to  inventory
reserves and bad debts  recorded in 2003 relating to InnFax  revenue assets that
have subsequently been written off.

OPERATING EXPENSES

For the six month period ended June 30, 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 $5,214,693  compared to $4,348,574  for the similar period in 2003,
an increase of $866,119 or 20%.

The operating  expenses of Universal totaled $3,518,291 for the six month period
ended June 30, 2004,  compared to $3,116,502  for the similar period in 2003, or
an increase of 11%. On a similar basis  AlphaNet's  operating  expenses  totaled
$1,436,173  compared to  $1,092,089 or an increase of 32%.  Zunicom's  operating
expenses totaled $260,229 compared to $139,983 or an increase of 86%.

The  increase in  Universal's  operating  expenses in 2004 is  primarily  due to
increases in consulting of $71,000,  travel of $43,000,  payroll and benefits of
$108,000,  commissions of $25,000, rent of $22,000, supplies and office machines
of $26,000,  legal of $44,000  and  increased  participation  in trade shows and
related marketing of $63,000.

The increase in AlphaNet's  operating expenses is primarily  attributable to the
$507,990  write down of certain assets that were taken out of service during the
six months ended June 30, 2004.

The  increase in  Zunicom's  operating  expenses is  primarily  due to the costs
associated with an investor relations service,  increased  franchise tax expense
and  increases  in travel  costs for the six month  period  ending June 30, 2004
compared to the same period in 2003.

INTEREST EXPENSE

Zunicom's  consolidated  interest  expense was $293,164 for the six month period
ended June 30,  2004  compared to $328,509  for the  similar  period in 2003,  a
decrease  of  $35,348.  The  decrease in  interest  expense is  attributable  to
payments made by AlphaNet on  outstanding  debt in fiscal 2003.  The decrease in
AlphaNet  notes  payable  at  interest  rates of 20.5% is  partially  offset  by
increased borrowings on the Universal line of credit, which has an interest rate
of the lender's prime plus 1.25% (5.25% at June 30, 2004).



                                       15
<PAGE>
LIQUIDITY

Zunicom,  on a consolidated basis, had cash and cash equivalents of $767,312 and
$394,685 at June 30, 2004 and 2003, respectively.

Net cash used in operations  was  $1,402,842 for the six month period ended June
30, 2004 compared to cash  provided by operations of $1,359,180  for the similar
period in 2003. The cash used in operating activities in 2004 was related to net
losses of $739,880,  a decrease in accrued liabilities of $601,785 and increases
in accounts  receivable  - trade of $999,098,  inventory of $209,171,  partially
offset by an  increase in  accounts  payable of $62,169,  a decrease in accounts
receivable - other of $50,912,  depreciation  and  amortization  of property and
equipment  of  $329,984,  the  provisions  for bad debts of  $134,907,  obsolete
inventory  of $55,040,  and the write off of  property  and  equipment  totaling
$507,990.  The cash provided by operating  activities in 2003 was related to net
income of $677,277,  depreciation  and amortization of property and equipment of
$490,793, the provisions for bad debts of $133,237, obsolete inventory $103,500,
decreases in inventory of  $1,423,499  and increases in accrued  liabilities  of
$356,495 offset by a decrease in accounts payable of $1,461,178,  an increase in
receivables  of  $347,874  as well as  increases  in other  assets  and  prepaid
expenses  totaling  $116,963  and a decrease in accounts  receivable  - other of
$100,394.

Net cash used by  investing  activities  for the six month period ended June 30,
2004,  was $94,989  compared to $87,202 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 six month period ended June
30,  2004 was  $1,605,793  compared  to cash  used in  financing  activities  of
$1,525,708  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 of  $1,600,021,  while the cash used in financing  activities  in
2003 was  primarily  related to repayments on long term debt of $392,414 and the
Universal line of credit totaling $1,111,715.

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 is an officer, director and shareholder. William Tan,
Zunicom's  President  and CEO, is Kim Yeow Tan's  brother.  As of June 30, 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 June 30, 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 AlphaNet's  indebtedness  assuming borrowing  availability and certain fixed
charge coverage ratio tests are met. Universal may borrow for this purpose up to
50% of its quarterly net income until the notes are retired.  For the six months
ended June 30, 2004 Universal did not upstream funds to Zunicom for repayment on
the AlphaNet notes payable.

                                       16
<PAGE>
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
over the next year.  However,  it may not be  sufficient to retire the Appel and
AHS  Funding  indebtedness  mentioned  above.  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 $6.9 million as of June 30, 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 June 30, 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 June 30,  2004,  and our
principal  executive officer and principal financial officer have concluded that
there was no  change  during  the  three  months  ended  June 30,  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.

                                       17
<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.

        The  Company  filed  a  report  on Form 8-K on July 1, 2004 in which the
        Company  furnished  a  press  release  announcing  Universal's  contract
        renewal with Brink's Home Security  to  continue  to  provide logistical
        services  for a  term of two years with successive  one   year renewals,
        effective June 1, 2004.




















                                       18
<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:  August 16, 2004              /s/ Julie Sansom-Reese
                                    --------------------------------
                                    Julie Sansom-Reese
                                    Chief Financial Officer
                                    (principal financial and accounting officer)







































                                       19