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 June 30, 2006

                                       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.)

    1720 Hayden Road, Carrollton, Texas                       75006
  (Address of principal executive offices)                  (Zip Code)

                                 (469) 892-1200
              (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)

                                       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 June 30, 2006, 8,627,466 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 June 30, 2006
and December 31, 2005. . . . . . . . . . . . . . . . . . . . . . . .   4

Unaudited Consolidated Statements of Operations for the three
and six months ended June 30, 2006 and 2005  . . . . . . . . . . . .   6

Unaudited Consolidated Statements of Cash Flows for the three
and six months ended June 30, 2006 and 2005  . . . . . . . . . . . .   8

Notes to Unaudited Consolidated Financial Statements . . . . . . . .   9

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .  14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  18

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .   19


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  20

Item 1A.  Risk Factors   . . . . . . . . . . . . . . . . . . . . . .  20

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .  20

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

Certifications


















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

                         ZUNICOM, INC. AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEETS


                                     ASSETS
                                                        June 30,   December 31,
                                                          2006         2005
                                                     ------------ ------------
CURRENT ASSETS
  Cash and cash equivalents                          $  1,656,943 $    731,626
  Accounts receivable - trade, net of
     allowance for doubtful
     accounts of $238,891 and $226,931                  9,794,152    8,446,086
  Accounts receivable - other                             146,394      114,802
  Inventories - finished goods, net of
     allowance for obsolescence of
     $248,663  and $158,663                            17,073,494   19,144,410
  Prepaid expenses and other current assets               437,265      665,802
                                                     ------------ ------------
     Total current assets                              29,108,248   29,102,726
                                                     ------------ ------------
PROPERTY AND EQUIPMENT
  Facsimile and business center equipment                 980,890      974,674
  Machinery and equipment                                 585,231      578,815
  Computer equipment                                      145,454      144,133
  Furniture and fixtures                                  313,910      272,937
  Leasehold improvements                                  311,056      303,597
  Vehicles                                                151,598      151,598
                                                     ------------ ------------
                                                        2,488,139    2,425,754
  Less accumulated depreciation
     and amortization                                  (1,776,893)  (1,698,786)
                                                     ------------ ------------
        Net property and equipment                        711,246      726,968
                                                     ------------ ------------
OTHER ASSETS                                               33,073       34,923
                                                     ------------ ------------
TOTAL ASSETS                                         $ 29,852,567 $ 29,864,617
                                                     ============ ============




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








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

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                        June 30,   December 31,
                                                          2006         2005
                                                     ------------ ------------
CURRENT LIABILITIES
  Line of credit                                     $ 12,673,963 $  9,261,435
  Notes payable - related party                                 -      217,128
  Current portion of long-term debt                        21,557       20,968
  Accounts payable                                      7,691,607   12,632,315
  Accrued liabilities                                     801,207      311,957
  Other current liabilities                                55,496       51,837
                                                     ------------ ------------
     Total current liabilities                         21,243,830   22,495,640
                                                     ------------ ------------
LONG-TERM DEBT, less current portion                       14,411       25,339
DEFERRED RENT, less current portion                       196,849      210,512

STOCKHOLDERS' EQUITY
  Preferred stock - $1.00 par value,
     1,000,000 shares authorized; 86,988 and
     88,988 Class A Preferred Shares issued
     and outstanding; liquidation preference
     of $456,687 as of June 30, 2006                       86,988       88,988
  Common stock - $0.01 par value;
     50,000,000 shares authorized; 8,627,466
     and 8,614,750 shares issued and out-
     standing                                              86,275       86,148
  Common stock pending issuance (250,000 shares)            2,500            -
  Additional paid-in capital                           14,799,659   14,601,331
  Accumulated deficit                                  (6,577,945)  (7,643,341)
                                                     ------------ ------------
     Total stockholders' equity                         8,397,477    7,133,126
                                                     ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 29,852,567 $ 29,864,617
                                                     ============ ============













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


                                       5
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                           For the three months ended  For the six months ended
                           --------------------------  ------------------------
                                     June 30,                  June 30,
                                     --------                  --------
                               2006         2005          2006         2005
                               ----         ----          ----         ----
REVENUES
 Sales                     $ 23,505,352 $ 20,446,237  $ 44,245,976 $ 37,848,809
 Service revenue                451,359      509,679       907,956      935,505
                           ------------ ------------  ------------ ------------
                             23,956,711   20,955,916    45,153,932   38,784,314
COST OF REVENUES
 Cost of goods sold          20,236,163   17,833,911    38,046,168   33,091,289
 Direct servicing costs         145,782      113,122       286,272      228,306
                           ------------ ------------  ------------ ------------
                             20,381,945   17,947,033    38,332,440   33,319,595
                           ------------ ------------  ------------ ------------
GROSS PROFIT                  3,574,766    3,008,883     6,821,492    5,464,719

OPERATING EXPENSES
 Selling, general
  and administrative          2,662,620    2,286,966     5,178,759    4,272,039
 Depreciation and
  amortization of
  property and equipment         77,264       76,797       153,091      160,582
                           ------------ ------------  ------------ ------------
                              2,739,884    2,363,763     5,331,850    4,432,621
                           ------------ ------------  ------------ ------------
INCOME FROM OPERATIONS          834,882      645,120     1,489,642    1,032,098

OTHER INCOME (EXPENSES)
 Interest expense (including
  $0, $33,098, $8,293 and
  $76,229 to related parties)  (221,448)    (155,384)     (411,221)    (296,471)
 Other, net                       7,332       (6,121)        3,430       (9,746)
                           ------------ ------------  ------------ ------------
                               (214,116)    (161,505)     (407,791)    (306,217)
                           ------------ ------------  ------------ ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES                620,766      483,615     1,081,851      725,881
PROVISION FOR INCOME TAXES            -            -             -            -
                           ------------ ------------  ------------ ------------
NET INCOME                 $    620,766 $    483,615  $  1,081,851 $    725,881
                           ============ ============  ============ ============
Net income attributable
 to common stockholders    $    613,118 $    474,689  $  1,065,396 $    706,774
                           ============ ============  ============ ============



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


                                       6
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
           UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - Continued

                           For the three months ended  For the six months ended
                           --------------------------  ------------------------
                                     June 30,                  June 30,
                                     --------                  --------
                               2006         2005          2006         2005
                               ----         ----          ----         ----
Net income per share
 attributable to common
 stockholders

       Basic               $       0.07 $       0.06  $       0.12 $       0.08
                           ============ ============  ============ ============
       Diluted             $       0.06 $       0.05  $       0.11 $       0.08
                           ============ ============  ============ ============
Number of weighted average
 shares of common stock
 outstanding

       Basic                  8,873,836    8,528,281     8,796,784    8,522,211
                           ============ ============  ============ ============
       Diluted                9,486,343    9,122,041     9,616,341    9,046,399
                           ============ ============  ============ ============






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
























                                       7
<PAGE>
                         ZUNICOM, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For The Six months ended June 30, 2006 and 2005

                                                          2006          2005
CASH FLOWS FROM OPERATING ACTIVITIES                -------------  ------------
Net income                                          $   1,081,851  $    725,881
Adjustments to reconcile net income
 to net cash used in operating  activities:
   Depreciation and amortization of
     property and equipment                               153,091       160,582
   Provision for bad debts                                117,773       124,831
   Provision for obsolete inventory                        90,000       116,000
   Write-off of property and equipment                      6,913         4,206
   Change in operating assets and liabilities
    Accounts receivable - trade                        (1,465,839)   (1,857,810)
    Accounts receivable - other                           (31,592)      227,675
    Inventories                                         1,980,916      (529,727)
    Prepaid expenses and other current
      assets                                              230,387      (112,417)
    Accounts payable                                   (4,940,708)   (1,290,158)
    Accrued liabilities                                   489,250     1,805,334
    Deferred rent                                         (10,004)       (4,347)
                                                    -------------  ------------
Net cash used in operating activities                  (2,297,962)     (629,950)
                                                    -------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                    (144,282)     (137,579)
                                                    -------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net activity on line of credit                       3,412,528     1,148,644
   Proceeds from exercise of warrants                     182,500             -
   Repayment of notes payable - related party            (217,128)     (335,000)
   Repayment of long-term debt                            (10,339)      (10,921)
                                                    -------------  ------------
Net cash provided by financing activities               3,367,561       802,723
                                                    -------------  ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                 925,317        35,194

Cash and cash equivalents at beginning of period          731,626       458,068
                                                    -------------  ------------
Cash and cash equivalents at end of period          $   1,656,943  $    493,262
                                                    =============  ============
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                       $     411,221  $    296,471
                                                    =============  ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING  ACTIVITIES:

   Preferred stock dividends paid through
    issuance of common stock                        $      16,455  $     19,107
                                                    =============  ============

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

                                       8
<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, 2006 are not necessarily indicative of the results that may be expected
for the year ended  December  31, 2006.  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,
2005.

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  ("UPG"  or
"Universal")  incorporated  in 1968, is a leading  distributor of portable power
and related synergistic  products,  third party fulfillment,  and custom battery
pack  assembly  and kitting  services to a wide range of  industries.  Zunicom's
other subsidiary,  AlphaNet Hospitality Systems Inc. ("AlphaNet"), is a provider
of guest communication services to the hospitality market.

NOTE C - STOCK-BASED COMPENSATION

On January 1, 2006, the Company adopted the modified  prospective method of SFAS
No. 123 (revised  2004),  "Share-Based  Payment"  ("SFAS No. 123R"),  which is a
revision of SFAS No. 123,  "Accounting for Stock-Based  Compensation"  (SFAS No.
123").  SFAS No.  123R  supersedes  APB  Opinion No. 25, and amends SFAS No. 95,
"Statement of Cash Flows".  SFAS No. 123R  requires all share based  payments to
employees,  including grants of employee stock options,  to be recognized in the
income  statement based on their fair values.  Pro forma disclosure is no longer
an alternative.  Under the modified  prospective  application,  SFAS No. 123R is
applied to new awards and to awards modified, repurchased or cancelled after the
effective date.  Compensation cost for the portion of awards for which requisite
service has not been rendered that are  outstanding  as of the effective date is
recognized as the requisite  service is rendered on or after the effective date.
The compensation cost for that portion of awards is based on the grant date fair
value of those awards as  calculated  for pro-forma  disclosures  under SFAS No.
123.  The  adoption  of SFAS 123R had no impact  on the  Company's  consolidated
financial statements as of and for the three and six months ended June 30, 2006.
In accordance with the modified  prospective method, the consolidated  financial
statements  for the prior periods have not been restated to reflect,  and do not
include, the impact of SFAS No. 123R.



                                       9
<PAGE>
Stock-based  compensation  expense  recognized during the period is based on the
value of the  portion  of the  stock-based  payment  awards  that is  ultimately
expected to vest.  All options  outstanding at the beginning of the period ended
June 30, 2006 were fully vested; therefore, there is no stock-based compensation
expense recognized in the consolidated statement of operations during the second
quarter of 2006. The aggregate  intrinsic  value of the 1,059,500  stock options
outstanding  at June 30, 2006  totaled  approximately  $500,000.  The  aggregate
intrinsic  value is calculated as the  difference  between the exercise price of
the underlying  awards and the quoted price of Zunicom's  common stock that were
"in-the-money" at June 30, 2006.

Prior to  January  1, 2006,  the  Company  accounted  for  stock-based  employee
compensation arrangements in accordance with provisions of Accounting Principles
Board ("APB")  Opinion No. 25,  "Accounting  for Stock Issued to Employees," and
complied with the disclosure provisions of SFAS 123, as amended by SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment
of FASB  Statement  No.  123"  ("SFAS  No.  148").  Under APB  Opinion  No.  25,
compensation  expense for employees is based on the excess,  if any, on the date
of grant,  of the fair value of the Company's  stock over the exercise price and
is recognized on a straight-line  basis over the vesting term of the option. Had
the Company determined  compensation for the period ended June 30, 2005 based on
the fair  value at the  grant  date for its stock  options  under  SFAS 123,  as
amended  by SFAS  148,  net  income  and net  income  per  share  would not have
significantly differed from reported net income.

NOTE D - NET INCOME PER SHARE

Basic net income per share is computed by dividing  net income  decreased by the
preferred  stock  dividends  of $7,648 and $8,926  for the three  month  periods
ending June 30, 2006 and 2005, respectively, and $16,455 and $19,107 for the six
month  periods  ending June 30,  2006 and 2005,  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.

For the three month period ending June 30, 2006, the dilutive effects of 438,531
stock options and 173,976  common shares  issuable upon  conversion of preferred
stock are included in the diluted net income per share calculation.  For the six
month period ending June 30, 2006, the dilutive  effect of 645,581 stock options
and other common stock  equivalents  and 173,976  common  shares  issuable  upon
conversion of outstanding preferred stock are included in the diluted net income
per share  calculation.  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 calculation  totaled 517,276 as they are anti-dilutive.  For the six month



                                       10
<PAGE>
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.

NOTE E - LINE OF CREDIT

Universal's  line of credit  agreement  with Compass Bank  provides for interest
payable  monthly  at LIBOR  Index  rate plus 2.5%  (7.61% at June 30,  2006) and
matures May 5, 2007. On July 25, 2005,  Universal entered into an 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
borrowings 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,  UPG 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.  On March 23,  2006,  UPG  entered  into  renewal and
modification  agreement on the line of credit  agreement  with Compass Bank. The
advance formula referenced in the Security Agreement as the "Borrowing Base" was
modified as follows:  eighty-five  percent (85.0%) of the  outstanding  value of
Borrower's Eligible Accounts Receivable (as defined in the Security  Agreement),
plus fifty  percent  (50.0%) of the value of Borrower's  Eligible  Inventory (as
defined  in the  Security  Agreement);  provided,  however  that  the  foregoing
sub-limit upon availability with respect to Borrower's  Eligible Inventory shall
not exceed  eighty-five  percent (85.0%) of the outstanding  value of Borrower's
Eligible Accounts Receivable at any one time outstanding. On April 18, 2006, UPG
entered into the second  renewal and  modification  agreement  with Compass Bank
which  increased  UPG's line of credit  from  $12,000,000  to  $16,000.000.  The
advance formula referenced in the Security Agreement as the "Borrowing Base" was
modified as follows:  eighty-five  percent (85.0%) of the  outstanding  value of
Borrower's Eligible Accounts Receivable (as defined in the Security  Agreement),
plus fifty  percent  (50.0%) of the value of Borrower's  Eligible  Inventory (as
defined  in  the  Security  Agreement).  Advances  against  Borrower's  Eligible
Inventory  shall not  exceed the  lesser of (a)  $8,500,000.00  or (b) an amount
equal  to the  product  of (i)  one  and  one-half  (1.5),  multiplied  by  (ii)
eighty-five  percent  (85%)  of the  outstanding  value of  Borrower's  Eligible
Accounts Receivable at any one time outstanding.  At June 30, 2006,  $12,673,963
was outstanding under the line of credit and $1,400,486  remained  available for
borrowings under the line of credit based on the borrowing formula.

NOTE F - NOTES PAYABLE - RELATED PARTY

AlphaNet had two notes payable to related party financing companies. One note in
the original principal amount of $1,525,000  payable to Appel Investments,  Inc.
of which Kim Yeow Tan,  William  Tan's  brother,  is an  officer,  director  and
shareholder.  The second note in the  original  principal  amount of  $1,000,000
payable  to AHS  Funding  LLC of which  Jenny  Jechart,  a  shareholder,  is the
principal shareholder. These notes were paid in full on March 9, 2006.

NOTE G - SEGMENTS

The battery and fulfillment segment represents the operations of Universal.  The
facsimile and business  center  segment  represents  the operations of AlphaNet.


                                       11
<PAGE>
These segments were  identified  based on the different  nature of the services,
location, and the type of customers.

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

                        Three months ended June 30, 2006
                        --------------------------------
                                            Facsimile
                                            and
                                Battery and Business
                                Fulfillment Center      Adjustment Consolidated
                                ----------- ----------  ---------- ------------
Revenue                         $23,505,352 $  451,359  $        -  $23,956,711
Depreciation and amortization        41,218     36,046           -       77,264
Segment profit (loss)               808,964    (45,691)   (142,507)     620,766
Segment assets                   28,518,470    344,269     989,828   29,852,567
Capital expenditures by segment      47,389     45,710           -       93,099


                        Three months ended June 30, 2005
                        --------------------------------
                                            Facsimile
                                            and
                                Battery and Business
                                Fulfillment Center      Adjustment Consolidated
                                ----------- ----------  ---------- ------------
Revenue                         $20,446,237 $  509,679  $        -  $20,955,916
Depreciation and amortization        32,527     43,805         465       76,797
Segment profit (loss)               598,986     14,097    (129,468)     483,615
Segment assets                   23,907,411    405,420     347,624   24,660,455
Capital expenditures by segment      19,702     27,385           -       47,087


                         Six months ended June 30, 2006
                         ------------------------------
                                            Facsimile
                                            and
                                Battery and Business
                                Fulfillment Center      Adjustment Consolidated
                                ----------- ----------  ---------- ------------
Revenue                         $44,245,976 $  907,956  $        -  $45,153,932
Depreciation and amortization        81,059     71,786         246      153,091
Segment profit (loss)             1,478,667   (126,210)   (270,606)   1,081,851
Segment assets                   28,518,470    344,269     989,828   29,852,567
Capital expenditures by segment      54,849     89,433           -      144,282











                                       12
<PAGE>
                         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

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

NOTE H - CONCENTRATIONS

A  significant  portion  of  Universal's  business  is with one major  customer,
Brink's  Home   Security,   which   represented   approximately   58%  and  60%,
respectively, of UPG's revenues for the three and six months ended June 30, 2006
and 57% and 59%, respectively,  of Zunicom's consolidated revenues for the three
and six months ended June 30,  2006,  respectively.  At June 30,  2006,  UPG had
aggregate  accounts  receivable  from this customer in the amount of $4,424,461.
Through  the date of this  report,  substantially  this  entire  amount has been
collected.

NOTE I - SHAREHOLDERS' EQUITY

During the six months ended June 30, 2006, the Company paid dividends of $16,455
on the Class A  Preferred  Stock  through the  issuance  of 8,716  shares of the
Company's  common  stock,  and 2,000  shares  of Class A  Preferred  Stock  were
converted  into 4,000 shares of the  Company's  common  stock.  In  addition,  a
related party  exercised  warrants to purchase  250,000  shares of the Company's
common stock. These shares are pending issuance at June 30, 2006 (See Note K).

NOTE J - LEGAL PROCEEDINGS

The  Company  is  subject  to legal  proceedings  and  claims  that arise in the
ordinary  course of  business.  The Company does not believe that the outcome of
these matters will have a material adverse effect on our 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 K - SUBSEQUENT EVENTS

On July 25, 2006, 250,000 shares were issued to Ventures  International  Limited
in conjunction with Caspic International, Inc.'s exercise of 250,000 warrants on
February  23, 2006,  upon which,  the 250,000  shares were  assigned to Ventures
International  Limited, an affiliated company. Mr. Tan is a director and officer
of both Caspic International Inc. and Ventures International Limited.





                                       13
<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, 2005.


RESULTS OF OPERATIONS

Currently, the operations of Zunicom are conducted through its two subsidiaries,
Universal  Power Group,  Inc.  ("UPG") and  AlphaNet  Hospitality  System,  Inc.
("AlphaNet").

REVENUES

THREE MONTHS ENDED JUNE 30, 2006 COMPARED TO JUNE 30, 2005

For the three  month  period  ended  June 30,  2006,  Zunicom  had  consolidated
revenues of $23,956,711  compared to $20,955,916 for the similar period in 2005,
an increase of $3,000,795 or 14%.

UPG had revenues of $23,505,352  for the three month period ended June 30, 2006,
compared to revenues of $20,446,237  for the similar period in 2005, an increase
of  $3,059,115  or 15%.  AlphaNet  had  revenues of $451,359 for the three month
period  ended June 30, 2006  compared  to  revenues of $509,679  for the similar
period in 2005, a decrease of $58,320 or 11%.

The $3,059,115  increase in UPG's revenues is mainly  attributable  to increased
revenues from battery product sales of $2,373,327  from the  comparative  period
due to price  increases,  sales to new customers and increased sales to existing
accounts. UPG anticipates continued growth in revenue from the sales of battery,
battery-powered product lines and new products. Additional increases in revenues
are  attributable  to  continued  growth  in  sales  to  Brink's  Home  Security
("Brinks"). Sales to Brinks totaled $13,663,439 for the three month period ended
June 30, 2006 and  $12,978,828 for the three month period ended June 30, 2005 an
increase of $684,611.  UPG anticipates continued growth in Brinks revenue due to
Brinks growing inventory requirements.

AlphaNet's  decrease  in  revenues  of $58,320 is  primarily  attributable  to a
decline in customer  usage and  de-installations  of its InnFax  product as well
higher percentage of revenue sharing with hotels for The Office(TM) product.




                                       14
<PAGE>
COST OF REVENUES

For the three month period ended June 30, 2006,  Zunicom's  consolidated cost of
revenues  increased to  $20,381,945  compared to cost of revenues of $17,947,033
for the similar period in 2005, an increase of $2,434,912 or 14%.

Universal's  cost of revenues  totaled  $20,236,163  for the three month  period
ended June 30, 2006,  compared to  $17,833,911,  or an increase of $2,402,252 or
13%.  AlphaNet's  cost of revenues  totaled  $145,782 for the three month period
ended June 30, 2006 compared to $113,122  during the similar  period in 2005, an
increase of $32,660 or 29%.

Cost of revenues as a percentage of revenues for UPG remained fairly  consistent
at 86% compared to 87% in the similar  period in 2005.  The gross margin for the
three month period ended June 30, 2006 from  fulfillment  and  distribution  for
Brinks was  approximately 11% compared to average gross margin of 17% from sales
to other customers.  UPG 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  increased
to 32% for the three month period  ending June 30, 2006  compared to 22% for the
same  period  in  2005.  The  increase  in costs  is  associated  to cost of new
installations,  repairs and maintenance, copier leases and wireless license fees
on The Office(TM) product.

OPERATING EXPENSES

For the three month period ended June 30, 2006, Zunicom's consolidated operating
expenses,  consisting of selling, general and administrative expenses as well as
depreciation and amortization of property and equipment  increased to $2,739,884
compared to $2,363,763  for the similar  period in 2005, an increase of $376,121
or 16%.

The selling,  general and administrative expenses of UPG were $2,245,795 for the
three  month  period  ending June 30, 2006  compared to  $1,891,072 in 2005,  an
increase  of  $354,723  or  19%.   UPG's   increase  in  selling,   general  and
administrative  expenses was  attributable  to increases in salaries and payroll
taxes totaling $95,626  associated with the Company's  improved  performance and
additional  employees.  Additional  increases in expenses were incurred for rent
totaling $50,458,  maintenance and utilities expenses of $47,677, commissions of
$24,357,  computer  services of  $24,098,  warehouse  supplies of $20,131,  bank
charges of $18,534, legal fees of $16,713, office supplies of $14,379, bad debts
of $14,088,  contract labor of $13,944 and insurance of $13,815. These increases
were offset mainly by the decrease in consulting  fees of $40,762.  The majority
of these expense increases were due to the new Las Vegas Branch which was opened
in the three month period ending June 30, 2006.

AlphaNet's  selling,  general and  administrative  expenses  for the three month
period ending June 30, 2006 were fairly  consistent  with the same period in the
prior year at $344,679 compared to $343,235, in 2005 an increase of $1,444.

Zunicom's  selling,  general  and  administrative  expenses  for the three month
period  ending June 30, 2006 were  $149,410  compared  to  $129,456,  in 2005 an
increase of $19,954 or 15%. The  increase is  attributable  to  increased  legal
expenses of $50,740,  travel of $11,833 and is offset primarily by reduced bonus
expenses of $40,683.

                                       15
<PAGE>
For the three month period ending June 30, 2006, the Company incurred $77,264 in
depreciation  and  amortization  expense  compared to $76,797 in 2005,  a slight
increase of $467.

INTEREST EXPENSE

Zunicom's  consolidated  interest  expense totaled  $221,448 for the three month
period ended June 30, 2006 compared to $155,384 for the similar  period in 2005,
an increase of $66,064.  The increase is due to increased  borrowings  under the
UPG line of credit at a higher  interest  rate  than the  similar  period in the
prior year offset by the decrease of the principal amount due on AlphaNet loans.
The AlphaNet loans were fully paid on March 9, 2006.


SIX MONTHS ENDED JUNE 30, 2006 COMPARED TO JUNE 30, 2005

For the six month period ended June 30, 2006, Zunicom had consolidated  revenues
of  $45,153,932  compared  to  $38,784,314  for the similar  period in 2005,  an
increase of $6,369,618 or 16%.

UPG had  revenues of  $44,245,976  for the six month period ended June 30, 2006,
compared to revenues of $37,848,809 for the similar period in 2005. AlphaNet had
revenues of $907,956 for the six month  period ended June 30, 2006,  compared to
revenues of $935,505 for the similar period in 2005.

The  $6,397,167  or 17%  increase in UPG's  revenues is mainly  attributable  to
revenues from increased  sales of battery,  battery  related and battery powered
products which increased by $3,991,764 from the comparative  period due to price
increases,  sales to new customers and increased sales to existing accounts. UPG
anticipates  continued  growth in  revenue  from the sales of  battery,  battery
powered  product lines and new products.  In addition,  sales to Brinks  totaled
$26,687,619 for the six month period ended June 30, 2006 compared to $24,283,393
for the six month period ended June 30, 2005. UPG anticipates  continued  growth
in Brinks revenue due to Brinks growing inventory requirements.

AlphaNet's  decrease  in  revenues  of  $27,549  or 3% is  attributable  to  the
continued decline in revenue on the Innfax product.

COST OF REVENUES

For the six month  period ended June 30, 2006,  Zunicom's  consolidated  cost of
revenues increased to $38,332,440 compared to $33,319,595 for the similar period
in 2005, an increase of $5,012,845 or 15%.

Universal's cost of revenues totaled  $38,046,168 for the six month period ended
June 30,  2006,  compared  to  $33,091,289  during the  similar  period in 2005.
AlphaNet's cost of revenues totaled $286,272 for the six month period ended June
30, 2006 compared to $228,306 during the similar period in 2005.

Cost of revenues as a percentage of revenues for UPG remained fairly  consistent
at 86% for the six month  period  ending June 30,  2006  compared to 87% for the
similar period in 2005. The gross margin for the six month period ended June 30,
2006 from fulfillment and distribution for Brinks was approximately 11% compared
to an  average  gross  margin  of 18%  from  sales to  other  customers.  UPG is
monitoring  customer and vendor pricing due to raw material cost increases which
are expected to continue in the near future.

                                       16
<PAGE>
AlphaNet's direct servicing costs as a percentage of service revenues  increased
to 32% for the six month  period  ending June 30,  2006  compared to 24% for the
same  period  in  2005.  The  increase  in  cost  is  associated  to cost of new
installations,  repairs and maintenance, copier leases and wireless license fees
on The Office(TM) product.

OPERATING EXPENSES

For the six month period ended June 30, 2006, Zunicom's  consolidated  operating
expenses,  consisting of selling, general and administrative expenses as well as
depreciation and amortization of property and equipment  increased to $5,331,850
compared to $4,432,621  for the similar  period in 2005, an increase of $899,229
or 20%.

The selling,  general and administrative expenses of UPG were $4,325,973 for the
six month  period  ending  June 30,  2006  compared  to  $3,516,857,  in 2005 an
increase  of  $809,116  or  23%.   UPG's   increase  in  selling,   general  and
administrative  expenses was  attributable  to increases in salaries and payroll
taxes totaling $176,670  associated with the Company's improved  performance and
additional  employees  and bonus  expense of $135,000.  Additional  increases in
expenses  include  increases in maintenance  and utilities  expenses of $92,746,
trade shows and travel and entertainment of $86,647, rent of $71,920,  warehouse
supplies of $42,400,  insurance of $39,778,  contract labor of $38,773, computer
services  of  $32,193,  bank  charges of  $30,829,  cash  donations  of $27,173,
commissions of $26,508,  legal fees of $18,940,  office supplies of $17,783, and
moving  expenses of $14,773.  These increases were offset mainly by the decrease
in consulting  fees of $72,495.  These  increases were due to closing the Kansas
branch  office and opening a new location in Las Vegas,  Nevada in the six month
period ending June 30, 2006.

AlphaNet's selling, general and administrative expenses for the six month period
ending June 30, 2006 were $726,886 compared to $703,051,  in 2005 an increase of
$23,835 or 3%. The increase is primarily  attributable to increased wage expense
of $51,399 due to commissions.  Additional  expense  increases were in equipment
rental of $8,893 and franchise tax of $8,713. These were offset by the reduction
in usage sales tax and license fees of $20,929  accounting fees of $12,947,  and
property taxes of $5,942.

Zunicom's selling,  general and administrative expenses for the six month period
ending June 30, 2006 were $278,991 compared to $212,713,  in 2005 an increase of
$66,278 or 31%. The increase is  attributable  to  increased  legal  expenses of
$81,634, travel and entertainment of $14,953, communications of $2,705 and press
release  costs of $2,055.  These  expenses  were  reduced by a decrease in bonus
expense of $40,683.

For the six month period ending June 30, 2006, the Company incurred  $153,091 in
depreciation and  amortization  expense compared to $160,582 in 2005, a decrease
of $7,491.

INTEREST EXPENSE

Zunicom's  consolidated  interest  expense was $411,221 for the six month period
ended June 30,  2006  compared to $296,471  for the similar  period in 2005,  an
increase of $114,750.  The increase is due to increased borrowings under the UPG
line of credit at a higher interest rate than the similar period in the prior as
well as AlphaNets loans were paid in full on March 9, 2006.

                                       17
<PAGE>
LIQUIDITY

Zunicom,  on a consolidated  basis,  had cash and cash equivalents of $1,656,943
and $493,262 at June 30, 2006 and 2005, respectively.

Net cash used in  operations  was  $2,297,962  compared to $629,950  for the six
month  periods  ending  June 30, 2006 and 2005,  respectively.  The cash used in
operating  activities  in 2006 is  attributable  to increases in trade  accounts
receivable and other  receivables of $1,465,839  and $31,592,  respectively,  as
well as  decreases  in accounts  payable and  deferred  rent of  $4,940,708  and
$10,004,  respectively.  These  changes  are offset  primarily  by net income of
$1,081,851 and by a decrease in inventories of $1,980,916,  prepaid  expenses of
$230,387,  an increase in accrued  liabilities  of  $489,250,  depreciation  and
amortization  of property and equipment of $153,091,  and the provisions for bad
debts and obsolete  inventory of $117,773  and $90,000,  respectively.  The cash
used in operating  activities in 2005 is primarily  attributable to increases in
trade  accounts   receivable   and   inventories  of  $1,857,810  and  $529,727,
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,   an  increase  in  accrued  liabilities  of
$1,805,334, 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.

Cash used in investing  activities for the six month period ended June 30, 2006,
was $144,282  compared to $137,579 for the similar period in 2005. The cash used
in 2006 and 2005 was related to the purchases of property and equipment.

Net cash  provided by financing  activities  for the six month period ended June
30, 2006 was $3,367,561 compared to $802,723 for the similar period in 2005. The
net cash provided by financing  activities  for 2006 was primarily  comprised of
net  borrowings  on UPG line of  credit  of  $3,412,528  and  proceeds  from the
exercise  of  warrants of  $182,500,  as well as cash used of  $217,128  for the
repayment of long term debt to related  parties and $10,339 for the repayment of
other long-term debt.

AlphaNet had two notes payable to related party financing companies. One note in
the original  principal  amount of $1,525,000 was payable to Appel  Investments,
Inc. of which Kim Yeow Tan, William Tan's brother,  is an officer,  director and
shareholder.  The second note in the original principal amount of $1,000,000 was
payable  to AHS  Funding  LLC of which  Jenny  Jechart,  a  shareholder,  is the
principal shareholder.  These notes, bore interest at 20.5%,  originally matured
on October 21, 2002 and were paid in full on March 9, 2006.

Zunicom  believes that cash provided by its operations and cash available  under
the UPG line of credit will be sufficient to meet 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.  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


                                       18
<PAGE>
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.

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 the six
months ended June 30, 2006 was not material.

Interest Rates

Our exposure to market rate risk for changes in interest rates relates primarily
to UPG's line of credit. A portion of the outstanding  borrowings on the line of
credit  bear  interest  at LIBOR plus 2.5%.  A change in the LIBOR  would have a
material effect on interest expense.

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  June 30,  2006.  Based  upon that  evaluation,  the  Company's  principal
executive  officer and  principal  financial  officer  have  concluded  that the
disclosure controls and procedures were effective as of June 30, 2006 to provide
reasonable  assurance that material  information relating to the Company is made
known to management including the CEO and CFO.

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






















                                       19
<PAGE>
PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Energizer  Holdings,  Inc.  and Eveready  Battery  Company,  Inc.  (collectively
"Eveready")  have initiated  legal  proceedings  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 ruled against Eveready and the
matter was  appealed  to the United  States  Court of  Appeals  for the  Federal
Circuit.  On January 25, 2006,  the Federal  Circuit  reversed the  Commission's
holding of  invalidity  and has  remanded for further  proceedings  based on its
construction  of  Eveready's  patent.  For more  information,  see 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.

In September of 2005, A.J.  Gilson, a former sales  representative  of Universal
filed an action in the District Court of Dallas County,  Texas against Universal
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 1A. Risk Factors

There are no material changes to the risk factors set forth in Item 1A of Part 1
of the  registrant's  Form 10-K for the year ended  December 31, 2005 filed with
the U.S. Securities and Exchange Commission on March 30, 2006.

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.

       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).


                                       20
<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).

       10.11 Revolving Credit and Security Agreement by and between Compass Bank
       and UPG, December 14, 2004.

       10.12 Purchase  Agreement by and between Brink's Home Security and UPG as
       adopted June 1, 2004.

       10.13 Renewal and Modification  Agreement by and between Compass Bank and
       UPG on March 23, 2006.

       10.14 Renewal and Modification  Agreement by and between Compass Bank and
       UPG on April 18, 2006.

       14.1 Code of Ethics and Business Conduct as adopted March 30, 2004.

       21.1 Subsidiaries of Issuer

       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.

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

       None.





















                                       21
<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 11, 2006             /s/ Julie Sansom-Reese
                                   --------------------------------
                                   Julie Sansom-Reese
                                   Chief Financial Officer
                                   (principal financial and accounting officer)







































                                       22