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 June 30, 2005

     [ ]  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 Drive 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, 2005, 8,535,952 shares of Common Stock were outstanding.













                                       1
<PAGE>
                                  Zunicom, Inc.
                                      INDEX

                                                                      Page
                                                                      ----
PART I - Financial Information

Item 1.  Financial Statements

Unaudited Consolidated Balance Sheets at June 30, 2005
and December 31, 2004. . . . . . . . . . . . . . . . . . . . . . . .   3

Unaudited Consolidated Statements of Operations for the three
and six months ended June 30, 2005 and 2004  . . . . . . . . . . . .   5

Unaudited  Consolidated  Statements  of Cash Flows for the six
months ended June 30, 2005 and 2004 . . . . . . . . . . . . . . . . .  6

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

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  15

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .   16


PART II - Other Information

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

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  17

Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . .  17

Item 4.  Submission of Matters to a Vote of Securities Holders . . .  17

Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . .  17

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .  17

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

Certifications . . . . . . . . . . . . . . . . . . . . . . . . .  31.1-1












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


                         ZUNICOM, INC. AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                        June 30,    December 31,
                                                          2005          2004
                                                          ----          ----
CURRENT ASSETS
 Cash and cash equivalents                           $    493,262  $    458,068
 Accounts receivable - trade, net of
   allowance for doubtful accounts
   of $268,447 and $249,447                             9,155,330     7,422,351
 Accounts receivable - other                               21,093       248,768
 Inventories - finished goods, net of
   allowance for obsolescence of
   $210,715 and $263,313                               13,704,701    13,290,974
 Prepaid expenses and other current assets                592,883       480,466
                                                     ------------  ------------
     Total current assets                              23,967,269    21,900,627
                                                     ------------  ------------

PROPERTY AND EQUIPMENT, NET                               655,539       682,748

OTHER ASSETS                                               37,647        37,647
                                                     ------------  ------------

TOTAL ASSETS                                         $ 24,660,455  $ 22,621,022
                                                     ============  ============





















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

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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                        June 30,    December 31,
                                                          2005          2004
                                                          ----          ----
CURRENT LIABILITIES
 Line of credit                                      $  9,675,547  $  8,526,903
 Current portion of notes payable - related party         525,128             -
 Current portion of long-term debt                         20,395        20,977
 Accounts payable                                       4,028,639     5,318,797
 Accrued liabilities                                    4,017,075     2,211,741
 Other current liabilities                                 36,697        49,101
                                                     ------------  ------------
    Total current liabilities                          18,303,481    16,127,519
                                                     ------------  ------------

NOTES PAYABLE - RELATED PARTY, less current portion             -       860,128
LONG-TERM DEBT, less current portion                       35,968        46,307
DEFERRED RENT, less current portion                       229,999       221,942

STOCKHOLDERS' EQUITY
 Preferred stock - $1.00 par value,
   1,000,000 shares authorized; 103,888 and
   104,588 Class A Shares issued and out-
   standing; liquidation preference of
   $545,412 as of June 30, 2005                           103,888       104,588
 Common stock - $0.01 par value;
   50,000,000 shares authorized; 8,535,952
   and 8,512,048 shares issued and out-
    standing                                               85,359        85,120
 Additional paid-in capital                            14,540,983    14,521,415
 Accumulated deficit                                   (8,639,223)   (9,345,997)
                                                     ------------  ------------
    Total stockholders' equity                          6,091,007     5,365,126
                                                     ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 24,660,455  $ 22,621,022
                                                     ============  ============














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

                                       4
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<S>                                                  <C>           <C>           <C>           <C>
                                                      For the three months ended For the six months ended
                                                      -------------------------- ------------------------
                                                               June 30,                   June 30,
                                                              ---------                   --------
                                                         2005          2004          2005         2004
                                                         ----          ----          ----         ----
REVENUES
 Sales                                               $ 20,446,237  $ 16,167,901  $ 37,848,809  $ 30,243,565
 Service revenue                                          509,679       524,433       935,505     1,066,397
                                                     ------------  ------------  ------------  ------------
                                                       20,955,916    16,692,334    38,784,314    31,309,962
COST OF REVENUES
 Cost of goods sold                                    17,833,911    14,138,271    33,091,289    26,266,038
 Direct servicing costs                                   113,122       125,318       228,306       263,003
                                                     ------------  ------------  ------------  ------------
                                                       17,947,033    14,263,589    33,319,595    26,529,041
                                                     ------------  ------------  ------------  ------------
GROSS PROFIT                                            3,008,883     2,428,745     5,464,719     4,780,921

OPERATING EXPENSES
 Selling, general and administrative                    2,284,341     2,136,108     4,267,833     4,376,719
 Depreciation and amortization of property
      and equipment                                        76,797       147,201       160,582       329,984
 Write off of property and equipment                        2,625       356,833         4,206       507,990
                                                     ------------  ------------  ------------  ------------
                                                        2,363,763     2,640,142     4,432,621     5,214,693
                                                     ------------  ------------  ------------  ------------
INCOME (LOSS) FROM OPERATIONS                             645,120      (211,397)    1,032,098      (433,772)

OTHER EXPENSES
 Interest expense (including $33,098, $39,173,
    $76,229 and $87,613 to related parties)              (155,384)     (151,640)     (296,471)     (293,164)
 Other, net                                                (6,121)       (7,761)       (9,746)      (12,944)
                                                     ------------  ------------  ------------  ------------
                                                         (161,505)     (159,401)     (306,217)     (306,108)
                                                     ------------  ------------  ------------  ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES           483,615      (370,798)      725,881      (739,880)
PROVISION FOR INCOME TAXES                                      -             -             -             -
                                                      -----------  ------------  ------------  ------------
NET INCOME (LOSS)                                     $   483,615  $   (370,798) $    725,881  $   (739,880)
                                                      ===========  ============  ============  ============

Net income (loss) attributable to common stockholders $   474,689  $   (380,595) $    706,774  $   (761,328)
                                                      ===========  ============  ============  ============
Net income (loss) per share attributable to
       common stockholders
       Basic                                          $      0.06  $      (0.05) $       0.08  $      (0.09)
                                                      ===========  ============  ============  ============
       Diluted                                        $      0.05  $      (0.05) $       0.08  $      (0.09)
                                                      ===========  ============  ============  ============
Number of weighted average shares of common stock
       outstanding
       Basic                                            8,528,281     8,454,924     8,522,211     8,450,041
                                                      ===========  ============  ============  ============
       Diluted                                          9,122,041     8,454,924     9,046,399     8,450,041
                                                      ===========  ============  ============  ============
</TABLE>









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

                                       5
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For The Six months ended June 30, 2005 and 2004

                                                            2005          2004
CASH FLOWS FROM OPERATING ACTIVITIES                        ----          ----
Net income (loss)                                       $   725,881 $  (739,880)
Adjustments to reconcile net income (loss)
 to net cash used in operating activities:
  Depreciation and amortization of property and equipment   160,582     329,984
  Provision for bad debts                                   124,831     134,907
  Provision for obsolete inventory                          116,000      55,040
  Write-off of property and equipment                         4,206     507,990
  Change in operating assets and liabilities
    Accounts receivable - trade                          (1,857,810)   (999,098)
    Accounts receivable - other                             227,675      50,912
    Inventories                                            (529,727)   (209,171)
    Prepaid expenses and other current assets              (112,417)      6,090
    Accounts payable                                     (1,290,158)     62,169
    Accrued liabilities                                   1,805,334    (601,785)
    Deferred rent                                            (4,347)          -
                                                        ----------- -----------
Net cash used in operating activities                      (629,950) (1,402,842)
                                                        ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                      (137,579)    (94,989)
                                                        ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net activity on line of credit                         1,148,644   1,600,021
   Proceeds from exercise of stock options                        -      17,970
   Repayment of long-term debt ($335,000 and
     $0 to related parties)                                (345,921)    (12,198)
                                                        ----------- -----------
Net cash provided by financing activities                   802,723   1,605,793
                                                        ----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                    35,194     107,962

Cash and cash equivalents at beginning of period            458,068     659,350
                                                        ----------- -----------
Cash and cash equivalents at end of period              $   493,262 $   767,312
                                                        =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                           $   296,471 $   293,164
                                                        =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:

  Preferred stock dividends paid through
   issuance of common stock                             $    19,107 $    21,448
                                                        =========== ===========
  Conversion of preferred stock to common stock         $       700 $         -
                                                        =========== ===========

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

                                       6
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
              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
all periods  presented.  The results for the three and six month  periods  ended
June 30, 2005 are not necessarily indicative of the results that may be expected
for the year ended  December  31, 2005.  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,
2004.

NOTE B - ORGANIZATION

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

NOTE C - STOCK BASED COMPENSATION

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance  with provisions of Accounting  Principles  Board ("APB") Opinion No.
25,  "Accounting  for Stock  Issued to  Employees."  Under APB  Opinion  No. 25,
compensation  expense for 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 three
and six month periods ended June 30, 2005 and 2004.  Had the Company  determined
compensation  based on the fair  value at the grant  date for its stock  options
under SFAS No. 123,  "Accounting  for Stock-Based  Compensation,"  as amended by
SFAS  No.  148,   "Accounting   for  Stock-Based   Compensation-Transition   and
Disclosure-an  amendment of FASB  Statement  No. 123," net income (loss) and net
income (loss) per share would not have significantly  differed from reported net
income (loss).

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


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

NOTE D - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting  Standards Board issued SFAS No. 123
(revised 2004), "Share-Based Payment" ("SFAS No. 123R"), which replaces SFAS No.
123 and  supersedes  APB Opinion No. 25. SFAS No 123R  requires all  share-based
payments  to  employees,  including  grants of  employee  stock  options,  to be
recognized in the financial statements based on their fair values. The pro forma
disclosures  previously  permitted  under  SFAS  No.  123 will no  longer  be an
alternative to financial statement  recognition.  For the Company, SFAS No. 123R
is effective January 1, 2006.

The  Company  plans to adopt the new  standard  using the  modified  prospective
method. Under the modified prospective method,  companies are required to record
compensation expense for new and modified awards over the related vesting period
of such awards prospectively and record compensation  expense  prospectively for
the  unvested  portion,  at the  date of  adoption,  of  previously  issued  and
outstanding  awards  over  the  remaining  vesting  period  of such  awards.  No
amendments  to  prior  periods   presented  are  permitted  under  the  modified
prospective method. The future impact of the adoption of SFAS No. 123R cannot be
predicted as this time because it will depend on levels of share-based  payments
granted by the Company in the future.  However, had the Company adopted SFAS No.
123R in prior periods,  the impact of that standard would have  approximated the
impact of SFAS No. 123 as  described in the  disclosure  of pro forma net income
(loss) included in the Stock-Based Compensation policy footnote.

NOTE E - 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 $8,926 and $9,797 for
the three month periods ending June 30, 2005 and 2004, respectively, and $19,107
and $21,448 for the six months ending June 30, 2005 and 2004,  respectively,  by
the weighted average number of common shares outstanding for the period.

Diluted net income  (loss) per share is computed by dividing  net income  (loss)
decreased/increased  by the preferred  stock  dividends by the weighted  average
number of common shares and common stock equivalents outstanding for the period.
The Company's  common stock  equivalents  include all common stock issuable upon
conversion of preferred stock and the exercise of outstanding  stock options and
warrants.

For the three month period ending June 30, 2005, the aggregate  number of common
stock  equivalents  that were  excluded  from the  diluted  net income per share
calculation  totaled  309,500  as they are  anti-dilutive.  For the three  month
period ending June 30, 2005, the dilutive  effect of 4,317,081 stock options and
warrants  and  207,776  shares  issuable  upon  conversion  of  the  outstanding
preferred  stock are  included in the diluted net income per share  calculation.
For the six month period ending June 30, 2005,  the  aggregate  number of common
stock  equivalents  that were  excluded  from the  diluted  net income per share


                                       8
<PAGE>
calculation totaled 517,276 as they are anti-dilutive.  For the six month period
ending  June 30,  2005,  the  dilutive  effect of  4,317,081  stock  options and
warrants  and 1,073  common  shares  issuable  upon  conversion  of  outstanding
preferred  stock are  included in the diluted net income per share  calculation.
For the three and six month periods  ended June 30, 2004,  basic and diluted net
loss per share is the same as the Company  incurred losses for the periods.  The
aggregate number of common stock equivalents  excluded from the diluted net loss
per share  calculation  for the three and six month periods ending June 30, 2004
totaled 4,985,757, as they are anti-dilutive.

NOTE F - LINE OF CREDIT

Universal's  current line of credit  agreement  with  Compass Bank  provides for
maximum  borrowings of $12,000,000  with interest payable monthly at LIBOR Index
rate plus 2.5% (5.74% at June 30,  2005) and  matures  May 5, 2007.  On July 25,
2005,  Universal  entered into an Interest Rate Swap Agreement with Compass Bank
fixing the interest  rate at 6.99% on the first  $6,000,000  of  borrowings  and
LIBOR Index Rate plus 2.5% on the  balance of the  outstanding  borrowing  under
Universal's  line of credit.  The line of credit is due on demand and 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.  In addition,  Universal must maintain  certain  financial  covenants
including  ratios on fixed charge  coverage and minimum  tangible net worth,  as
well as, maximum debt to tangible net worth and an interest  coverage  ratio. At
June  30,  2005,  $9,675,547  was  outstanding  under  the  line of  credit  and
$2,324,453  remained  available for borrowings under the line of credit based on
the borrowing formula.

NOTE G - NOTES PAYABLE - RELATED PARTY

AlphaNet has two notes payable to related party financing companies. One note in
the original  principal  amount of $1,525,000  is payable to Appel  Investments,
Inc. of which Kim Yeow Tan, William Tan's brother,  is an officer,  director and
shareholder.  As of June 30, 2005,  AlphaNet  owes $335,912 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 of the Company,  is the
principal shareholder.  As of June 30, 2005, AlphaNet owes $189,216 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, 2006.
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.

NOTE H - 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 services,
location, and the type of customers.








                                       9
<PAGE>
A summary of the segment financial  information  reported to the chief operating
decision maker is as follows:

                         Six months ended June 30, 2005
                         ------------------------------
                                           Facsimile
                                           and
                               Battery and Business
                               Fulfillment Center      Adjustment Consolidated
                               ----------- ----------- ---------- ------------
Revenue                        $37,848,809 $   935,505 $       -  $38,784,314
Depreciation and amortization       68,117      91,534       931      160,582
Segment profit (loss)            1,022,109     (83,425) (212,803)     725,881
Segment assets                  23,907,411     405,420   347,624   24,660,455
Capital expenditures by segment     66,861      70,718         -      137,579

                         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

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

NOTE I - CONCENTRATIONS

A  significant  portion  of  Universal's  business  is with one major  customer,
Brink's Home Security,  which  represented  approximately  62%, of the Company's
second quarter 2005 revenue. At June 30, 2005,  Universal had aggregate accounts
receivable  from this customer in the amount of $4,407,334.  Through the date of
this report, substantially all of this amount has been collected.

NOTE J - SHAREHOLDERS' EQUITY

During the six months ended June 30, 2005, the Company paid dividends of $19,107
on the Series A Preferred  Stock  through the  issuance of 22,507  shares of the
Company's  common stock and 700 shares of preferred  stock were  converted  into
1,400 shares of the Company's common stock.

NOTE K - SUBSEQUENT EVENTS

On July 25, 2005,  Universal  entered into an Interest Rate Swap  Agreement with
Compass  Bank  fixing  the  interest  rate at 6.99% on the first  $6,000,000  of
borrowings  and LIBOR  Index Rate plus 2.5% on the  balance  of the  outstanding
borrowing under  Universal's  line of credit.  Prior to the agreement  Universal
paid  interest  on a  floating  LIBOR  Index  rate plus 2.5% on all  outstanding
borrowings, which on date of this agreement was 5.96%.

                                       10
<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 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, 2004.

RESULTS OF OPERATIONS

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

REVENUES

THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO JUNE 30, 2004

For the three  month  period  ended  June 30,  2005,  Zunicom  had  consolidated
revenues of $20,955,916  compared to $16,692,334 for the similar period in 2004,
an increase of $4,263,582 or 25%.

Universal had revenues of $20,446,237  for the three month period ended June 30,
2005,  compared to revenues of  $16,167,901  for the similar  period in 2004, an
increase of $4,278,336  or 26%.  AlphaNet had revenues of $509,679 for the three
month  period  ended June 30, 2005  compared  to  revenues  of $524,433  for the
similar period in 2004, a decrease of $14,754 or 3%.

The $4,278,336  increase in Universal's  revenues is primarily  attributable  to
increased revenues from sales to Brinks.  Specifically,  sales to Brinks totaled
$12,978,828  for the three month period ended June 30, 2005 and  $9,687,209  for
the three month  period  ended June 30, 2004.  Universal  anticipates  continued
growth in  Brinks  revenue  due to Brinks  growing  inventory  requirements.  In
addition,  sales of  battery,  battery  related  and  battery  powered  products
increased $986,717 over the previous year due to new customers, increased volume
on existing accounts and diversification  into new products compared to the same
period last year.  We  anticipate  continued  sales  increases  in the  battery,
battery powered product line and new products.

AlphaNet's  decrease  in  revenues  of $14,754 is  primarily  attributable  to a
decline in customer usage of its InnFax product. AlphaNet will continue to see a
decline in revenues on the Innfax product as a result of the de-installations of
InnFax product from customer sites that occurred in 2004.





                                       11
<PAGE>
COST OF REVENUES

For the three month period ended June 30, 2005,  Zunicom's  consolidated cost of
revenues  increased to  $17,947,033  compared to cost of revenues of $14,263,589
for the similar period in 2004, an increase of $3,683,444 or 26%.

Universal's  cost of revenues  totaled  $17,833,911  for the three month  period
ended June 30, 2005,  compared to  $14,138,271,  or an increase of $3,695,640 or
26% in the similar period in 2004.  AlphaNet's cost of revenues totaled $113,122
for the three month period ended June 30, 2005  compared to $125,318  during the
similar period last year, a decrease of $12,196 or 10%.

Cost of revenues as a percentage of revenues for Universal  remained  consistent
at 87%  compared to the similar  period in 2004.  The gross margin for the three
month period ended June 30, 2005 from  fulfillment and  distribution  for Brinks
was  approximately  10%  compared to average  gross  margin of 17% from sales to
other  customers.  Universal  continues to monitor  customer and vendor  pricing
due to raw material cost increases which are expected to continue  in  the near
future.

AlphaNet's direct servicing costs as a percentage of service revenues  decreased
to 22% for the three month period  ending June 30, 2005  compared to 24% for the
same period in 2004.  The decrease in cost is  associated  to  additional  costs
incurred during 2004 for the de-installation of Innfax from customer sites.

OPERATING EXPENSES

For the three month period ended June 30, 2005, Zunicom's consolidated operating
expenses,  consisting of selling, general and administrative expenses as well as
depreciation  and  amortization  and the  write-off  of property  and  equipment
decreased to $2,363,763 compared to $2,640,142 for the similar period in 2004, a
decrease of $276,379 or 10%.

The  operating  expenses of  Universal  totaled  $1,891,072  for the three month
period ended June 30, 2005,  compared to  $1,707,775  for the similar  period in
2004 an increase of 11%. For the same periods AlphaNet's operating expenses were
$340,912  compared  to  $809,363,  a  decrease  of 58% and  Zunicom's  operating
expenses were $129,456 compared to $123,004 an increase of 5%.

The  increase in  Universal's  operating  expenses in 2005 is  primarily  due to
increases in bonus expense of $150,000  based on the  performance of the Company
and trade shows and travel of $49,220,  insurance  of $33,666,  and new employee
cost of $27,476  increased  due to the cost on  focusing  sales in the  consumer
market.  These costs were partially offset by reductions in legal and consulting
fees of approximately $83,000.

The decrease in AlphaNet's  operating expenses is attributable to the write down
of certain InnFax and "The Office"  assets of $356,833 that occurred  during the
three months ended June 30, 2004.  Write downs during the similar period in 2005
totaled $2,625. In addition, AlphaNet reduced employment and sales and marketing
costs as a cost reduction  measure of approximately  $27,000 for the three month
period ending June 30, 2005 compared to the similar period 2004.

The  increase in  Zunicom's  operating  expenses of $6,452 is  primarily  due to
employee related expenses offset by the discontinuation of the investor relation
services.

                                       12
<PAGE>
INTEREST EXPENSE

Zunicom's  consolidated interest expense was $155,384 for the three month period
ended June 30,  2005  compared to $151,640  for the similar  period in 2004,  an
increase of $3,744.

SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO JUNE 30, 2004

For the six month period ended June 30, 2005, Zunicom had consolidated  revenues
of  $38,784,314  compared  to  $31,309,962  for the similar  period in 2004,  an
increase of $7,474,352 or 24%.

Universal  had revenues of  $37,848,809  for the six month period ended June 30,
2005,  compared  to  revenues of  $30,243,565  for the  similar  period in 2004.
AlphaNet  had revenues of $935,505 for the six month period ended June 30, 2005,
compared to revenues of $1,066,397 for the similar period in 2004.

The $7,605,244 or 25% increase in Universal's revenues is primarily attributable
to  revenues  from  increased  sales to  Brinks.  Specifically,  sales to Brinks
totaled  $24,283,393  for the six month period  ended June 30, 2005  compared to
$18,308,358 for the six month period ended June 30, 2004. Universal  anticipates
continued growth in Brinks revenue due to Brinks growing inventory requirements.
In addition,  sales of battery,  battery  related and battery  powered  products
increased by $1,630,209  over the previous year due to new customers,  increased
volume on existing  accounts and  diversification  into new products compared to
the same period last year.

AlphaNet's  decrease  in revenues  of  $130,892  or 12% is  attributable  to the
continued  decline  in  revenue  on  the  Innfax  product  as a  result  of  the
de-installations that occurred in 2004.

COST OF REVENUES

For the six month  period ended June 30, 2005,  Zunicom's  consolidated  cost of
revenues  increased to  $33,319,595  compared to cost of revenues of $26,529,041
for the similar period in 2004, an increase of $6,790,554 or 26%.

Universal's cost of revenues totaled  $33,091,289 for the six month period ended
June 30,  2005,  compared  to  $26,266,038  during the  similar  period in 2004.
AlphaNet's cost of revenues totaled $228,306 for the six month period ended June
30, 2005 compared to $263,003 during the similar period in 2004.

Cost of revenues as a percentage of revenues for Universal  remained  consistent
at 87% for the six month  period  ending June 30,  2005  compared to the similar
period in 2004.  The gross  margins for the six month period ended June 30, 2005
from fulfillment and distribution for Brinks were  approximately 10% compared to
average  gross  margins  of 19%  from  sales to other  customers.  Universal  is
monitoring customer and vendor pricing due to raw material 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 six month  period  ending June 30,  2005  compared to 25% for the
same period in 2004.




                                       13
<PAGE>
OPERATING EXPENSES

For the six month period ended June 30, 2005, Zunicom's  consolidated  operating
expenses,  consisting of selling, general and administrative expenses as well as
depreciation  and  amortization  and the  write-off  of property  and  equipment
decreased to $4,432,621 compared to $5,214,693 for the similar period in 2004, a
decrease of $782,072 or 15%.

The operating  expenses of Universal totaled $3,516,857 for the six month period
ended June 30,  2005,  compared to  $3,518,291  for the similar  period in 2004.
AlphaNet's  operating  expenses  totaled  $703,051  compared to  $1,436,173 or a
decrease of 51%.  Zunicom's  operating  expenses  totaled  $212,713  compared to
$260,229 or an decrease of 18%.

The slight decrease in Universal's  operating  expenses in 2005 is primarily due
to decreases  in legal fees of $91,000,  consulting  costs of $34,000  offset by
increased  insurance  costs of  $57,000,  bad debt  expense of $33,000 and bonus
expense of $29,000.

The decrease in AlphaNet's  operating expenses is primarily  attributable to the
$507,990  write down of certain  assets  that were  de-installed  during the six
months  ended June 30,  2004.  Write  downs  during the  similar  period in 2005
totaled  $3,244.  There were  additional  decreases in other  employee  costs of
$41,000 and property  taxes of $17,000 for the six month period  ending June 30,
2005 compared to the similar period in 2004.

The decrease in Zunicom's operating expenses is primarily due to discontinuation
of an investor  relations service provider which contributed a $60,000 decrease,
decreased  franchise tax expense of $18,000 and travel costs of $9,500 offset by
increased bonus expense of $41,000 for the six month period ending June 30, 2005
compared to the same period in 2004.

INTEREST EXPENSE

Zunicom's  consolidated  interest  expense was $296,471 for the six month period
ended June 30,  2005  compared to $293,164  for the  similar  period in 2004,  a
decrease of $3,307.

LIQUIDITY

Zunicom,  on a consolidated basis, had cash and cash equivalents of $493,262 and
$767,312 at June 30, 2005 and 2004, respectively.

Net cash used in  operations  was $629,950  compared to  $1,402,842  for the six
month  periods  ending  June 30, 2005 and 2004,  respectively.  The cash used in
operating  activities  in 2005 is primarily  attributable  to increases in trade
accounts receivable, inventories and accrued liabilities of $1,857,810, $529,727
and $1,805,334,  respectively, and reductions in accounts payable of $1,290,158.
These  changes are offset  primarily by net income of $725,881 and by a decrease
in other  accounts  receivable of $227,675,  depreciation  and  amortization  of
property  and  equipment  of  $160,582,  and the  provisions  for bad  debts and
obsolete  inventory of $124,831  and  $116,000,  respectively.  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 trade accounts receivable of
$999,098  and  inventory of  $209,171,  partially  offset by a decrease in other


                                       14
<PAGE>
accounts  receivable of $50,912,  depreciation  and amortization of property and
equipment of  $329,984,  the  provisions  for bad debts of $134,907 and obsolete
inventory  of $55,040,  and the  write-off of property  and  equipment  totaling
$507,990.

Net cash used by  investing  activities  for the six month period ended June 30,
2005, was $137,579  compared to $94,989 for the similar period in 2004. The cash
used in 2005 and 2004 was related to the purchase of property and equipment.

Net cash  provided by financing  activities  for the six month period ended June
30, 2005 was $802,723 compared to $1,605,793 for the similar period in 2004. The
net cash provided by financing  activities  for 2005 was primarily  comprised of
net borrowings on the Universal  line of credit of  $1,148,644,  as well as cash
used of $345,921 for the repayment of long-term debt. The cash provided for 2004
was primarily related to net borrowings on the Universal line of credit totaling
$1,600,021.

AlphaNet has two notes payable to related party financing companies. One note in
the original  principal  amount of $1,525,000  is payable to Appel  Investments,
Inc. of which Kim Yeow Tan, William Tan's brother,  is an officer,  director and
shareholder.  As of June 30, 2005,  AlphaNet  owes $335,912 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, 2005,  AlphaNet  owes $189,216 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, 2006.
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 F in
the interim unaudited  consolidated 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 net  income  quarterly  until the
notes are  retired.  For the six month  period  ending June 30,  2005  Universal
borrowed $335,000 in which Zunicom used to pay down the AlphaNet loans.

Zunicom  believes that cash provided by its operations and cash available  under
the Universal  line of credit will be sufficient to meet its  operational  needs
over the next year.  However,  it may not be  sufficient to retire the Appel and
AHS Funding indebtedness.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange

Our customers are primarily located in the U.S.  However,  many of our suppliers
are located  outside the U.S.  and our  financial  results  could be impacted by
foreign  currency  exchange rates and market  conditions  abroad.  However,  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.



                                       15
<PAGE>
Our  international  business  is  subject to risks  typical of an  international
business, including, but not limited to: differing economic conditions,  changes
in  political   climate,   differing  tax  structures,   other  regulations  and
restrictions  and foreign  exchange  rate  volatility.  Accordingly,  our future
results  could be  materially  adversely  affected  by changes in these or other
factors.  The effect of foreign exchange rate fluctuations on us during 2004 was
not material.

Interest Rates

Our exposure to market rate risk for changes in interest rates relates primarily
to  Universal's  line of credit.  The line of credit,  maturing May 2007,  bears
interest at LIBOR plus 2.5%. A change in the LIBOR would have a material  effect
on interest  expense.  The  Company's  existing  long-term  debt owed to related
parties has fixed interest rates;  however,  future borrowings may bear interest
at variable rates and,  accordingly,  the Company's  exposure to market risk for
changes  in  interest  rates may change in the  future.  At June 30,  2005,  the
Company's  long term debt owed to related  parties is $525,128.  This debt bears
interest at a fixed rate of 20.5% and is due in full on March 27, 2006.

On July 25, 2005,  Universal  entered into an Interest Rate Swap  Agreement with
Compass  Bank  fixing  the  interest  rate at 6.99% on the first  $6,000,000  of
borrowings and the remaining  outstanding  borrowing balance interest is paid at
the LIBOR Index Rate plus 2.5% under Universal's line of credit.


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, 2005,  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,  2005,  and our
principal  executive officer and principal financial officer have concluded that
there was no  change  during  the  three  months  ended  June 30,  2005 that has
materially  affected or is reasonably expected to materially affect our internal
control over financial reporting.












                                       16
<PAGE>
PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

In re Certain Zero-Mercury-Added  Alkaline Batteries, Parts Thereof and Products
Containing   Same,   Investigation   No.   337-TA-493,   in  the  United  States
International  Trade  Commission.  This  is an  action  initiated  by  Energizer
Holdings,  Inc. and Eveready Battery  Company,  Inc.  (collectively  "Eveready")
against the Company and over 20 other  respondents  relating to the manufacture,
importation  and sale of certain  alkaline  batteries  alleged to infringe  U.S.
Patent No. 5,464,709. Eveready is seeking a general exclusion order with respect
to future  importation of these batteries.  The Company has denied  infringement
and  has  been  vigorously   defending  this  action.  The  International  Trade
commission has ruled against Eveready and the matter is currently being appealed
to the United States Court of Appeals for the Federal Circuit.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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

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

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

        31.2 Certification related to Quarterly Report Form 10-Q disclosures

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

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

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

        None.




                                       17
<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 15, 2005            /s/ Julie Sansom-Reese
                                  --------------------------------
                                  Julie Sansom-Reese
                                  Chief Financial Officer
                                  (principal financial and accounting officer)







































                                       18