UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2007

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


           For the transition period from ____________ to ____________

                         Commission file number: 0-27210

                                  Zunicom, Inc.
             (Exact name of registrant as specified in its charter)

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

  4315 West Lovers Lane, Dallas, Texas                       75209
(Address of principal executive offices)                  (Zip Code)

                                 (214) 352-8674
              (Registrant's telephone number, including area code)

                                      None
(Former name,former address and former fiscal year,if changed since last report)

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.01 Par Value
                          -----------------------------
                                (Title of Class)

                    Class A Preferred Stock, $1.00 Par Value
                    ----------------------------------------
                                (Title of Class)

         Units, consisting of one (1) share of Common Stock and one (1)
                        share of Class A Preferred Stock
               --------------------------------------------------
                                (Title of Class)



                                       1
<PAGE>

     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act.    Yes [ ]         No. [X]

     Indicate by check mark if the  registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ]  No [X]

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                                             Yes [X] No [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
    Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).                  Yes [ ] No [X]

     As of April 30, 2007, 8,946,000 shares of Common Stock were outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None





























                                       2
<PAGE>
                                  Zunicom, Inc.
                                      INDEX

                                                                      Page
                                                                      ----
PART I - Financial Information

Item 1.  Financial Statements

Unaudited Consolidated Balance Sheets at March 31, 2007
and December 31, 2006. . . . . . . . . . . . . . . . . . . . . . . .   4

Unaudited Consolidated Statements of Operations for the three
months ended March 31, 2007 and 2006 . . . . . . . . . . . . . . . .   6

Unaudited Consolidated Statements of Cash Flows for the three
months ended March 31, 2007 and 2006 . . . . . . . . . . . . . . . .   8

Notes to Unaudited Consolidated Financial Statements . . . . . . . .  10

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .  15

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

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


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  18

Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . .  18

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

Certifications




















                                       3
<PAGE>
PART  I  -  FINANCIAL  INFORMATION
----------------------------------
Item  1.  Financial  Statements


                          ZUNICOM, INC. AND SUBSIDIARY
                      UNAUDITED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                      March 31,   December 31,
                                                        2007         2006
                                                   -------------  -------------
CURRENT ASSETS
  Cash and cash equivalents                        $     740,940  $   8,259,709
  Accounts receivable - trade, net of
    allowance for doubtful accounts of
    $4,889 and $4,889                                     14,889         23,232
  Interest receivable from unconsolidated investee             -         10,578
  Inventories - finished goods                            17,527         20,142
  Prepaid expenses and other current assets               50,367         70,426
                                                   -------------  -------------
     Total current assets                                823,723      8,384,087

PROPERTY AND EQUIPMENT
  Business center equipment                              962,193        972,832
  Machinery and equipment                                 24,870         24,870
  Computer equipment                                     147,916        145,454
  Furniture and fixtures                                  33,298         33,298
  Leasehold improvements                                 122,365        122,365
                                                   -------------  -------------
                                                       1,290,642      1,298,819

  Less accumulated depreciation and amortization      (1,089,104)    (1,073,259)
                                                   -------------  -------------
      Net property and equipment                         201,538        225,560
                                                   -------------  -------------
NOTES RECEIVABLE FROM UNCONSOLIDATED INVESTEE          5,850,000      5,850,000

INVESTMENT IN UNCONSOLIDATED INVESTEE                  6,291,083      6,125,383
                                                   -------------  -------------
TOTAL ASSETS                                       $  13,166,344  $  20,585,030
                                                   =============  =============











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


                                       4
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                UNAUDITED CONSOLIDATED BALANCE SHEETS - Continued

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                      March 31,   December 31,
                                                        2007         2006
                                                   -------------  -------------
CURRENT LIABILITIES
  Accounts payable                                 $     201,470  $     237,310
  Accrued liabilities                                    200,942        395,633
  Due to unconsolidated investee                               -        186,619
                                                   -------------  -------------
     Total current liabilities                           402,412        819,562

NON-CURRENT DEFERRED TAX LIABILITY                     3,824,222      3,824,222

TOTAL LIABILITIES                                      4,226,634      4,643,784

STOCKHOLDERS' EQUITY
  Preferred stock - $1.00 par value,
   1,000,000 shares authorized; 61,988 and
   86,988 Class A Preferred Shares issued
   and outstanding; liquidation preference
   of $325,437 as of March 31, 2007                       61,988         86,988
  Common stock - $0.01 par value;
   50,000,000 shares authorized; 8,946,000
   and 8,891,394 shares issued and out-
   standing                                               89,460         88,914
  Additional paid-in capital                           8,684,166     14,818,893
  Retained earnings                                      104,096        946,451
                                                   -------------  -------------
        Total stockholders' equity                     8,939,710     15,941,246
                                                   -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $  13,166,344  $  20,585,030
                                                   =============  -============

















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


                                       5
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2007 and 2006

                                                          2007         2006
                                                     ------------  ------------
REVENUES
  Sales                                              $          -  $ 20,740,624
  Service revenue                                         385,852       456,597
                                                     ------------  ------------
                                                          385,852    21,197,221
COST OF REVENUES
  Cost of goods sold                                            -    17,810,005
  Direct servicing costs                                  110,566       140,490
                                                     ------------  ------------
                                                          110,566    17,950,495
                                                     ------------  ------------
GROSS PROFIT                                              275,286     3,246,726

OPERATING EXPENSES
  Selling, general and administrative                     443,920     2,516,139
  Depreciation and amortization of
    property and equipment                                 33,168        75,827
                                                     ------------  ------------
                                                          477,088     2,591,966
                                                     ------------  ------------
INCOME (LOSS) FROM OPERATIONS                            (201,802)      654,760

OTHER EXPENSES
  Interest income (expense) net, including
    $86,548 and ($7,890)from related parties              157,620      (189,773)
  Equity in earnings of investee                          147,184             -
  Gain on equity transactions of investee                  18,515             -
  Other, net                                               (8,910)       (3,902)
                                                     ------------  ------------
                                                          314,409      (193,675)
                                                     ------------  ------------
INCOME BEFORE PROVISION FOR INCOME TAXES                  112,607       461,085
                                                     ------------  ------------
PROVISION FOR INCOME TAXES                                      -             -
                                                     ------------  ------------














            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                       6
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2007 and 2006
                                  (continued)

                                                          2007         2006
                                                     ------------  ------------
NET INCOME                                           $    112,607  $    461,085
                                                     ============  ============
Net income attributable to common stockholders       $    104,096  $    452,278
                                                     ============  ============
Net income per share attributable to common
    stockholders
    Basic                                            $       0.01  $       0.05
                                                     ============  ============
    Diluted                                          $       0.01  $       0.05
                                                     ============  ============
Cash dividends per share                             $       0.80  $          -
                                                     ============  ============
Number of weighted average shares of common
    stock outstanding
    Basic                                               8,904,343     8,718,896
                                                     ============  ============
    Diluted                                             9,229,641     9,518,023
                                                     ============  ============






























            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                       7
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For The Three Months Ended March 31, 2007 and 2006

                                                          2007         2006
                                                     ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                           $    112,607  $    461,085
Adjustments to reconcile net income to net cash
  used in operating activities:
   Depreciation and amortization of property
  and equipment                                            33,168        75,827
   Provision for bad debts                                      -        34,364
   Provision for obsolete inventory                             -        30,000
   Write off of property and equipment                      3,605           545
   Gain on equity transactions of investee                (18,515)            -
   Equity in earnings of investee                        (147,184)            -
   Non-cash stock-based compensation                       38,986             -
   Change in operating assets and liabilities:
     Accounts receivable - trade                            8,342       (29,357)
     Accounts receivable - other                           (2,925)       22,594
     Inventories                                            2,615       151,103
     Prepaid expenses and other current assets             33,562       170,476
     Other assets                                               -         1,850
     Accounts payable                                     (35,840)   (3,562,179)
     Accrued liabilities                                 (194,698)      355,531
     Due to investee                                     (186,619)            -
                                                     ------------  ------------
Net cash used in operating activities                    (352,896)   (2,288,161)
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                     (12,751)      (51,181)
                                                     ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net activity on line of credit                               -     2,534,453
   Proceeds from exercise of warrants                           -       182,500
   Repayment of notes payable - related party                   -      (217,128)
   Repayment of long-term debt                                  -        (5,134)
   Dividends paid on common stock                      (7,153,122)            -
                                                     ------------  ------------
Net cash provided (used in) by financing activities    (7,153,122)    2,494,691
                                                     ------------  ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (7,518,769)      155,349

Cash and cash equivalents at beginning of period        8,259,709       731,626
                                                     ------------  ------------









            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                       8
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For The Three Months Ended March 31, 2007 and 2006
                                  (continued)
                                                          2007         2006
                                                     ------------  ------------
Cash and cash equivalents at end of period           $    740,940  $    886,975
                                                     ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                        $         99  $    189,773
                                                     ============  ============
Income taxes paid                                    $    230,000  $          -
                                                     ============  ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES

   Dividends paid through issuance of common stock   $      8,511  $      8,807
                                                     ============  ============
   Conversion of preferred stock to common stock     $     25,000  $          -
                                                     ============  ============

































            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                       9

<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited consolidated 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,  2007.  The results for the three month
period ended March 31, 2007 are not  necessarily  indicative of the results that
may be expected for the year ended December 31, 2007. The unaudited consolidated
financial  statements included in this filing should be read in conjunction with
the  Company's  audited  consolidated  financial  statements  and notes  thereto
included in the Company's annual report on form 10-K for the year ended December
31, 2006.

In December 2006 the Company's  previously  wholly-owned  subsidiary,  Universal
Power Group,  Inc. ("UPG" or  "Universal"),  completed an  underwritten  initial
public offering which resulted in the Company's  ownership interest in UPG being
reduced from 100 percent to its present  ownership  interest of 40 percent.  The
Company consolidated UPG in its financial statements until December 31, 2006 and
currently accounts for UPG as an unconsolidated investee under the equity method
of accounting.  The Company has adopted the income  statement  gain  recognition
method of accounting  for issuances of a subsidiary's  stock in accordance  with
SEC Staff Accounting Bulletin No. 51.

Recent Accounting Pronouncements

In January 2007, the Company  adopted the Financial  Accounting  Standards Board
Interpretation  No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes  - An
Interpretation  of  FASB  Statement  No.  109"  (FIN  48).  This  Interpretation
clarifies  the  accounting  for  uncertainty  in income  taxes  recognized  in a
company's financial  statements.  FIN 48 requires companies to determine whether
it is  "more  likely  than  not"  that a tax  position  will be  sustained  upon
examination by the appropriate taxing authorities before any part of the benefit
can be recorded in the financial  statements.  It also provides  guidance on the
recognition,  measurement and classification of income tax uncertainties,  along
with any related  interest  and  penalties.  The Company did not  recognize  any
adjustments to their financial  statements as a result of its  implementation of
FIN 48.

In February 2007, the FASB issued  Statement of Financial  Accounting  Standards
No. 159, "The Fair Value Option for Financial  Assets and Financial  Liabilities
-- Including an amendment of FASB Statement No. 115," (SFAS 159).  This standard
allows a company to  irrevocably  elect fair value as the initial and subsequent
measurement  attribute for certain financial assets and financial liabilities on
a contract-by-contract basis, with changes in fair value recognized in earnings.
The provisions of this standard are effective as of the beginning of a reporting



                                       10
<PAGE>
entity's  first fiscal year  beginning  after  November 15, 2007. The Company is
currently  evaluating  what  effect the  adoption of SFAS 159 will have on their
financial statements.

NOTE B - ORGANIZATION

Zunicom,  Inc., ("Zunicom" or the "Company") was formed on January 10, 1992 as a
Texas corporation.  Zunicom's  consolidated  wholly-owned  subsidiary,  AlphaNet
Hospitality  Systems  Inc.  ("AlphaNet"),  is a provider of guest  communication
services  to the  hospitality  market.  Zunicom  holds  a 40  percent  ownership
interest in UPG, a  distributor  and supplier to a diverse and growing  range of
industries  of portable  power and  related  synergistic  products,  provider of
third-party logistics services and a custom battery pack assembler.

NOTE C - STOCK-BASED COMPENSATION

Stock-based  compensation  expense recognized in the statement of operations for
the three months ended March 31, 2007  includes  compensation  expense for fully
vested  stock-based  payment awards granted prior to March 31, 2007. The Company
had no stock-based compensation for the three month period ending March 31, 2006
as all outstanding options were fully vested at the beginning of the period.

   Valuation Assumptions

There were no options  granted during the three months ended March 31, 2006. The
fair  values  of  option  awards  were  estimated  at the  grant  date  using  a
Black-Scholes option pricing model with the following  assumptions for the three
months ended March 31, 2007:

                                                   For the Three Months Ended
                                                        March 31, 2007
                                                        --------------
Weighted average grant date fair value                   $       1.56
Weighted average assumptions used:
  Expected dividend yield                                        0.00%
  Risk-free interest rate                                        4.60%
  Expected volatility                                             138%
  Expected life (in years)                                          5


The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options  that have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

Expected  volatility  is based on historical  volatility  and in part on implied
volatility.  The expected term considers the  contractual  term of the option as
well as historical exercise and forfeiture behavior. The risk-free interest rate
is based on the rates in effect on the grant date for U.S. Treasury  instruments
with maturities matching the relevant expected term of the award.


                                       11
<PAGE>
   Activity and Summary

Stock option activity under the 1999 stock option plan was as follows:

                                                             Weighted Average
                                           Number of Shares   Exercise Price
                                           ----------------  -----------------
Options outstanding at December 31, 2006         1,054,500   $           0.84

      Granted                                       25,000   $           1.75

      Exercised                                         --   $             --

      Canceled, lapsed  or forfeited              (654,500)  $           0.81
                                           ---------------
Options outstanding at March 31, 2007              425,000   $           0.95
                                           ===============

Of the 1,054,500 options  outstanding as of December 31, 2006, 654,500 lapsed as
of February  25,  2007,  in  accordance  with the terms of the 1999 Stock Option
Plan.  Under the terms of that plan, if the  Company's  interest in a subsidiary
falls  below 50%,  employees  of that  subsidiary  will no longer be  considered
employees of the Company for purposes of the Plan and any options they hold will
lapse 60 days  from  the  event  which  caused  the  Company's  interest  in the
subsidiary  to drop  below  50%.  Accordingly,  certain  employees  of UPG  were
affected by the IPO of UPG, which  resulted in the Company's  interest in UPG to
be reduced from 100% to 40%.

The following table  summarizes stock options  outstanding  under the 1999 stock
option plan at March 31, 2007:

                        Options Outstanding      Options Exercisable
                -------------------------------- --------------------
                             Weighted
                              Average
                             Remaining  Weighted             Weighted
                 Number of  Contractual  Average  Number of   Average
Range of          Options      Life     Exercise   Options   Exercise
Exercise Prices Outstanding (in years)   Price   Exercisable  Price
--------------- ----------- ----------- -------- ----------- --------
$ 0.90              400,000         2.4 $   0.90     400,000 $   0.90

$ 1.75               25,000         9.8 $   1.75      25,000 $   1.75
                ----------- ----------- -------- ----------- --------
$ 0.90 - $ 1.75     425,000         2.8 $   0.95     425,000 $   0.95
                =========== =========== ======== =========== ========

At March 31, 2007,  the aggregate  intrinsic  value of options  outstanding  was
$12,000 and the aggregate  intrinsic  value of options  exercisable was $12,000.
The  aggregate  intrinsic  value is  calculated  as the  difference  between the
exercise  price of the  underlying  awards and the quoted price of the Company's
common stock for those awards that have an exercise  price  currently  below the
quoted price.

At March 31, 2007, all outstanding options were fully vested.


                                       12
<PAGE>
NOTE D - NET INCOME PER SHARE

Basic net income per share is computed by dividing  net income  decreased by the
preferred stock dividends of $8,511 and $8,807 for the three months ending March
31, 2007 and 2006, respectively, by the weighted average number of common shares
outstanding for the period.

Diluted net income per share 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 dilutive  effect of 400,000  options has been included in the computation of
dilutive net income per share for the three months ended March 31, 2007.  25,000
options and the "as-if" conversion of the preferred stock into 123,976 shares of
common stock have been excluded from the diluted loss per share  computation for
the three months ended March 31, 2007 as they are  anti-dilutive.  For the three
months ended March 31, 2006 the  aggregate  number of common  stock  equivalents
that were  excluded  from the diluted net income per share  calculation  totaled
173,976 as they were  anti-dilutive.  For the three  months ended March 31, 2006
the dilutive effect of 799,127 stock options and other common stock  equivalents
are included in the diluted net income per share calculation.

NOTE E - UNCONSOLIDATED SUBSIDIARY - INVESTEE

UPG was a  consolidated  subsidiary  of the Company  for the three month  period
ended March 31, 2006 and is accounted  for under the equity method of accounting
for the three month  period  ended  March 31,  2007.  Following  is a summary of
financial  information of UPG for the three months ended March 31, 2007 and 2006
(in thousands):

                                                   Three Months Ended March 31,
                                                   ----------------------------

                                                           2007          2006
--------------------------------------------------    -----------   -----------
Net revenues                                          $    23,540   $    20,741
Cost of revenues                                           20,099        17,810
Gross profit                                                3,441         2,931
Operating expenses                                          2,637         2,175
Income from operations                                        804           756
Interest expense                                             (367)         (182)
Other income                                                  173             1
Income from operations before income tax provision            610           575
Income tax provision                                         (242)         (237)
                                                      -----------   -----------
Net income                                            $       368   $       338
                                                      ===========   ===========

At March 31, 2007 the  carrying  value of the  Company's  investment  in UPG was
$6,291,083.  The market value of the 2,000,000  shares of UPG's common stock the
Company owns was  approximately  $9,900,000 based on the closing price per share
at March 31, 2007 of $4.95.



                                       13
<PAGE>
NOTE F - SHAREHOLDERS' EQUITY

During the three months ended March 31, 2007,  the Company paid a cash  dividend
of $0.80 per share, totaling $7,153,122 to shareholders of its common stock. The
dividend was paid on March 23, 2007  primarily  from proceeds  received from the
sale of  1,000,000  shares of common stock of UPG that the Company sold in UPG's
IPO.

During the three  months ended March 31,  2007,  the Company  paid  dividends of
$8,511 on the class A Preferred  Stock  through the  issuance of 4,606 shares of
the Company's common stock.

NOTE G - LEGAL PROCEEDINGS

The  Company  is  subject  to legal  proceedings  and  claims  that arise in the
ordinary  course of  business.  Management  does not believe that the outcome of
these matters will have a material adverse effect on the Company's  consolidated
financial position,  operating results, or cash flows. However,  there can be no
assurance that such legal proceedings will not have a material impact.

NOTE H - COMMITTMENTS

The  Company  has  guaranteed  payment  of a line  of  credit  owed  by UPG to a
financial  institution.  The line of credit is secured by the assets of UPG.  At
March 31, 2007, the outstanding  balance owed by UPG under the $16,000,000  line
of credit  guaranteed by the Company was $15,639,595.  In the event UPG defaults
on its obligation,  the Company would be required to make cash payments equal to
the  unpaid  balance  of the line of  credit  plus  all  accrued  penalties  and
interest.  The  line of  credit  originally  expired  May 5,  2007  but has been
extended for 45 days to June 19,  2007.  The line of credit is in the process of
being renewed and Zunicom believes that they will be removed as a guarantor. The
risk level of this guarantee is mitigated by UPG's collateral  pledged to secure
the line of credit.
























                                       14
<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 Unaudited  Consolidated Interim 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 those 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, 2006.


RESULTS OF OPERATIONS

Currently,  the  operations  of Zunicom are conducted  through its  wholly-owned
subsidiary, AlphaNet.

REVENUES

For the three month  period  ended  March 31,  2007,  Zunicom  had  consolidated
revenues of $385,852  compared to $21,197,221  for the similar period in 2006, a
decrease of  $20,811,369  or 98.2%.  Effective  with UPG's IPO in December 2006,
UPG's financial results are no longer consolidated with those of Zunicom. Of the
$20,811,369   decrease  in  revenue,   $20,740,624   or  99.7%  is  due  to  the
deconsolidation of UPG.

AlphaNet  had  revenues of $385,852  for the three month  period ended March 31,
2007,  compared  to  revenues of  $456,597  for the  similar  period in 2006,  a
decrease of $70,745,  or 15.5%. Of the $70,745  decrease in revenue,  $33,570 is
due  to  the  continuing  decline  of  the  InnFax(TM)  product  driven  by  the
competition of in-room internet  service.  The remaining  $37,175 of the revenue
decrease is due principally to a decline in the number of new  installations  of
the Office(TM) product and decreased renewals.

COST OF REVENUES

For the three month period ended March 31, 2007, Zunicom's  consolidated cost of
revenues is $110,566 compared to cost of revenues of $17,950,495 for the similar
period in 2006, an decrease of $17,839,929 or 99.4%.

Of  the  total  decrease  in  cost  of  revenues,  $17,810,005  is  due  to  the
deconsolidation  of UPG.  The  remaining  decrease  in the cost of  revenues  of
$29,924 is due to AlphaNet's decrease in revenues.

The direct servicing costs of AlphaNet's  InnFax(TM) product continue to decline
as  contracts  continue  to  expire  and  AlphaNet  is no  longer  marketing  or
installing  the InFax  product.  In  addition,  direct  servicing  costs for the



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Office(TM)  product  also  declined  principally  in the  areas of  repairs  and
maintenance,  installation  costs and licensing  consistent with the decrease in
new installations.

OPERATING EXPENSES

For the  three  month  period  ended  March  31,  2007,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
and  depreciation  and  amortization  of property  and  equipment  decreased  to
$477,088  compared to $2,591,966  for the similar  period in 2006, a decrease of
$2,114,878 or 81.6%.

Of  the  total  decrease  in  operating  expenses,  $2,080,178  is  due  to  the
deconsolidation  of UPG.  The  remainder  of the decrease of $34,700 is due to a
decrease in  operating  expenses of AlphaNet of $94,883  offset by  increases in
Zunicom's expenses of $60,183.

AlphaNet's  selling,  general and  administrative  expenses  for the three month
period ending March 31, 2007 were $287,324  compared to $382,207 for the similar
period in 2006,  a decrease  of  $94,883 or 24.8%.  The  decrease  is  primarily
attributable to decreased employment costs due to the reduction of one position,
decreased equipment costs and decreased travel expenses.

Zunicom's  selling,  general  and  administrative  expenses  for the three month
period ending March 31, 2007 were $189,764  compared to $129,581 for the similar
period in 2006,  representing  an increase of $60,183 or 46.4%.  The increase is
attributable  to increased  legal fees,  consulting  fees and accounting fees in
connection with its on-going operations after the deconsolidation of UPG.

For the three month period ending March 31, 2007, the Company  recorded  $33,168
in  depreciation  and  amortization  expense  compared  to $75,827 in 2006.  The
decrease is principally due to the deconsolidation of UPG.

OTHER INCOME / EXPENSE

Zunicom's  consolidated  interest income / expense represents income of $157,620
for the three  month  period  ended  March 31,  2007  compared  to an expense of
$189,773  for the similar  period in 2006,  an overall net increase in income of
$347,393.  The increase is due to the deconsolidation of UPG and the elimination
of borrowings under the UPG line of credit from Zunicom's consolidated financial
results offset by interest income from notes receivable from UPG.

Equity in earnings of investee of $147,184  and gain on equity  transactions  of
investee  of  $18,515,  respectively,  represents  Zunicom's  share of UPG's net
income for the three month  period ended March 31, 2007 and changes in equity of
UPG,  both recorded in  accordance  with the equity method of accounting  for an
unconsolidated investee.

LIQUIDITY

Zunicom,  on a consolidated  basis, had cash and cash equivalents of $740,940 at
March 31, 2007.

Net cash used in operations was $352,896 for the three month period ending March
31, 2007. The cash used in operating activities is primarily attributable to net


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<PAGE>
income of $112,607,  $33,168 in depreciation  and  amortization,  and $38,986 in
stock based  compensation  and a decrease in prepaid  expenses and other current
assets of  $33,562,  offset by equity in earnings  of UPG of  $147,184,  gain on
equity  transactions of UPG of $18,515,  and decreases in accrued liabilities of
$194,698, accounts payable of $35,840 and payable to related party of $186,619.

Net cash used by investing activities for the three-month period ended March 31,
2007, related to purchases of property and equipment was $12,751.

Net cash used in financing activities for the three-month period ended March 31,
2007 was $7,153,122  representing  payment of a cash dividend $0.80 per share on
the Company's common stock.

Zunicom's  primary  sources  of cash in 2007  will  be from  the  operations  of
AlphaNet  and the  interest  income on the notes  receivable  from UPG.  Zunicom
believes that the cash  generated from those sources will be sufficient to meets
its operational needs over the next year.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange

Our customers  are primarily  located in the U.S. and a few customers in Canada.
Our exchange rate risk between the US and Canadian  dollar is minimal because we
conduct so little business in Canada.  In addition,  the aggregate impact of any
likely exchange rate fluctuations  would be immaterial as most payments are made
in U.S.  dollars.  We have not used derivative  instruments to hedge our foreign
exchange risks though we may choose to do so in the future.

Interest Rates

We currently  have no direct  borrowings and therefore are not exposed to market
rate risk for changes in interest rates other than through our guaranty of UPG's
line of credit. In addition, our notes receivable from UPG are at fixed rates of
interest.

ITEM 4. CONTROLS AND PROCEDURES

The Company's  management,  including the Company's  principal executive officer
and  principal  financial  officer,  has  evaluated  the  effectiveness  of  the
Company's  disclosure controls and procedures (as defined in Rules 13(a) - 15(e)
and 15(d) - 15(e) under the  Securities  Exchange Act of 1934) as of the quarter
ended  March 31,  2007.  Based upon that  evaluation,  the  Company's  principal
executive  officer and  principal  financial  officer  have  concluded  that the
disclosure  controls and  procedures  were not effective as of March 31, 2007 to
insure that the information  required to be disclosed by us in the reports filed
or submitted by us under the  Securities  Exchange Act of 1934, as amended,  was
recorded, processed, summarized or reported within the time periods specified in
the rules and  regulations  of the SEC,  and  include  controls  and  procedures
designed  to ensure that  information  required  to be  disclosed  by us in such
reports was accumulated and communicated to management,  including our principal
executive  officer and principal  financial  officer,  as  appropriate  to allow
timely decisions regarding required disclosures.




                                       17
<PAGE>

The Company's registered independent public accounting firm, KBA Group, LLP, has
advised  us that in  connection  with the review of our  consolidated  financial
statements  for the three months  ended March 31,  2007,  they noted an internal
control  deficiency  constituting a material weakness as defined in professional
standards.  The Company experienced a significant loss of experienced  personnel
in connection  with UPG's IPO. As a result,  we have relied on the services of a
consultant  to  complete  this 10-Q.  The  Company  has  initiated  measures  to
eliminate any recurrence of deficiency in future reporting.

Based  on the  steps  taken,  management  (i)  believes  that  the  consolidated
financial  statements  included in this 10-Q are fairly  stated in all  material
respects.  and (ii) does not believe that the material weakness  described above
will continue.

There were no changes in the Company's internal control over financial reporting
that occurred  during the Company's  last fiscal  quarter,  other than described
above that have  materially  affected,  or are  reasonably  likely to materially
affect, the Company's internal control over financial reporting.




PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

In September of 2005, A.J. Gilson, a former sales representative of UPG filed an
action in the District  Court of Dallas  County,  Texas  against UPG and Zunicom
claiming  damages  for  breach of  contract  in the amount of  $430,722  and all
reasonable and necessary  attorney fees. In relation to this matter, the Company
is defending  itself and considers the claim without merit.  Management does not
expect the final  resolution of this claim to have a material  adverse effect on
our  financial  position.  However,  depending  on the  amount  and timing of an
unfavorable  resolution of claim against the Company, or the costs of settlement
or litigation, the Company's future results of operations or cash flows could be
materially adversely affected.

Item 6. Exhibits.

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

          3.1 Articles of Incorporation,  as amended  (incorporated by reference
          to the Company's  Registration Statement on Form SB-2, Commission File
          No. 33-98662, filed on October 30, 1995 and amended on January 5, 1996
          and January 23, 1996).

          3.2  Certificate  of  Designation  (incorporated  by  reference to the
          Company's  Registration  Statement on Form SB-2,  Commission  File No.
          33-98662, filed on October 30, 1995 and amended on January 5, 1996 and
          January 23, 1996).

          3.2A Amended Certificate of Designation  (incorporated by reference to
          the Company's  Registration  Statement on Form SB-2,  Commission  File
          No.33-98662,  filed on October 30, 1995 and amended on January 5, 1996
          and January 23, 1996).

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<PAGE>
          3.3 Bylaws  (incorporated  by reference to the Company's  Registration
          Statement on Form SB-2, Commission File No. 33-98662, filed on October
          30, 1995 and amended on January 5, 1996 and January 23, 1996).

          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 2003.

          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 2003.










































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                                    Signature
                                    ---------

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



                                       Zunicom, Inc.
                                       -----------------------------
                                           (Registrant)

Date:  May 20, 2007                    /s/ John C. Rudy
                                       --------------------------------
                                       John C. Rudy
                                       Chief Financial Officer
                                       (principal financial officer)







































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