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Zoom Reports Profit For The Second Quarter Of 1998

Boston, MA, July 24, 1998 - Zoom Telephonics, Inc. (NASDAQ: ZOOM), a leading manufacturer of faxmodems and other data communications products, today reported sales of $12.1 million for its second quarter ending June 30, 1998, up 1% from $12.0 million for the second quarter of 1997. Sales for the first six months of 1998 were $30.9 million, up 3% from the same period in 1997.

Zoom reported a net loss for the second quarter of 1998 of $1.6 million or $.21 per share, versus a net loss of $4.3 million or $.58 per share for the second quarter of 1997. For the first six months of 1998, Zoom reported a net loss of $1.4 million or $.18 per share, versus a net loss of $5.3 million or $.71 per share for the same period of 1997.

The Company began introducing its V.90 standard 56K modems in February 1998, which contributed to increased 56K sales in the second quarter, but was also responsible for lower prices, price protection, and stock rotation for both pre-standard 56K and 33.6K modems.

Zoom ended the quarter with a strong balance sheet, with a current ratio of 12.5, cash of $16.4 million or $2.19 per share, and stockholders' equity of $5.24 per share.

"Our sales of 56K modems in the second quarter of 1998 were predominantly based on the new V.90 56K modem standard," said Frank Manning, Zoom's President. "Sales of 33.6K and prestandard K56flex modems slowed considerably, and the combination of stock rotations, price reductions, and price protection credits reduced sales dollars for the quarter. Zoom increased its shelfspace share to 13.6%, second to 3Com's U.S. Robotics and well above third-place Diamond's 7.9%, according to the July 1998 "Hot Market Monitor" by Personal Technology Research. America Online announced in June that they would reach full deployment of the V.90 standard in mid-July, and we believe that this and the rollout of V.90 by Internet Service Providers worldwide will drive V.90 unit volumes. Going forward, Zoom is well-positioned, with strong relationships with major retailers, distributors, Internet Service Providers, and computer manufacturers, and superb reviews of our 56K technology. In the past 11 months Zoom's 56K modems have placed first in ten major industry awards. Zoom continues to be recognized as a leader in providing high performance communications products at competitive prices."

For additional information, please contact Investor Relations, Zoom Telephonics, 207 South Street, Boston, Massachusetts, 02111, telephone (617)423-1072, fax (617)338-5015, e-mail address: Investor@zoomtel.com. Zoom's World Wide Web site is www.zoomtel.com.

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This press release contains certain forward-looking statements including, without limitation, statements relating to 56K market expansion and to the company's future results. These forward-looking statements involve risks and uncertainties, including that there can be no assurance of future results, and other risks and uncertainties indicated from time to time in Zoom's filings with the Securities and Exchange Commission.
 

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