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Zoom Telephonics Reports Results
for the Second Quarter Ending 6/30/01

Boston, July 27th, 2001 —Zoom Telephonics, Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other Internet access products, today reported sales of $10.8 million for its second quarter ending June 30, 2001, down 18% from the second quarter of 2000. Sales for the first six months of 2001 were $21.1 million, down 23% from the first six months of 2000.

Zoom's second quarter 2001 sales increased 5% over the first quarter of 2001, primarily due to growth in worldwide OEM and North American non-OEM sales.

Zoom reported a net loss of $2.6 million or $.33 per share for the second quarter of 2001, versus a net loss of $937 thousand or $.12 per share for the second quarter of 2000. For the first six months of 2001, Zoom reported a net loss of $7.8 million or $1.00 per share, versus a net loss of $1.9 million or $.24 per share for the first six months of 2000.

Zoom ended the second quarter with a strong balance sheet, with a current ratio of 6.7, cash of $5.4 million or $.69 per share, and stockholders' equity of $28.8 million or $3.66 per share. Zoom succeeded in reducing its net inventory to $13.8 million, down from $21.9 million on December 31, 2000 and $17.3 million on March 31, 2001.

According to PC Data's tracking of U.S. dial-up modem retailers, from May 2000 to May 2001 Zoom grew its market share from 11.2% to 14.4%. Revenues for all dial-up modem manufacturers declined 36% as unit volume dropped 26% and average selling price dropped 14%. "We expect sales of dial-up modems by retailers to increase when Internet Service Providers roll out service that supports the new V.92 and V.44 standards," said Frank Manning, Zoom's President and CEO. "Zoom is a leader in V.92 and V.44, and our Zoom, Hayes®, and Global Village® brands should benefit from the expected surge in sales. Until then we will continue to try to grow our share of dial-up modem revenues in the USA, the UK, and other major markets; and we will position ourselves for growth in the broadband and wireless network product areas."

During the second quarter of 2001 Zoom increased its sales of cable modems. Zoom recently achieved @Home® level 2 approval for two of its cable modems, and Zoom now has the only PCI cable modem with CableLabs, WHQL, and @Home approvals. Zoom has recently begun cable modem shipments to two top U.S. computer retailers, Fry's and Micro Center®, and Zoom has received a commitment from another major retailer. In addition, Zoom is shipping to some cable service providers and has received commitments from some original equipment manufacturers

Zoom also continues to expand its wireless local area network product line, which now includes a range of low-cost 11 Mbps wireless network interface cards, an access point, a gateway, and a building-to-building bridge.

Zoom has scheduled a Q2 2001 earnings conference call for Friday, July 27th at 8:45a.m. Eastern Time. The call will be simulcast to stock analysts and other interested parties on Zoom's website (www.zoomtel.com/Q2) and other financial and investor-oriented websites via the CCBN / Business Wire StreetEvents network. Shortly after the conference call, a recorded broadcast will be available on Zoom's website and on the StreetEvents network.

For additional information, please contact:

Investor Relations,
Zoom Telephonics
207 South Street
Boston, Massachusetts 02111
Telephone: (617) 423-1072
e-mail address: investor@zoomtel.com.
Zoom's World Wide Web site is www.zoomtel.com

This release contains forward-looking information relating to Zoom's plans, expectations and intentions, including statements relating to the V.92 modem market, Zoom's share of the dial-up modem market, Zoom's ability to make required investments, the importance of the high-volume retailer market channel, and Zoom's ability to sell cable modems, ADSL modems, wireless networking, and other advanced networking products. Actual results may be materially different than those expectations as a result of known and unknown risks, including: uncertainty of new product development and introduction, including budget overruns, project delays and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated and other delays in shipments of products; uncertainties inherent in financial projections that, by their nature, are based upon assumptions, many of which are not in the control of the company; Zoom's dependence on one or a limited number of suppliers for certain key components; early stage of development of the cable and DSL data communications markets, and uncertainty of market growth of those markets; rapid technological change; competition; and other risks set forth in Zoom's filings with the Securities and Exchange Commission. Zoom cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Zoom's expectations or any change in events, conditions or circumstance on which any such statement is based.
 

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