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[Mobility Electronics, Inc. Letterhead]

August 5, 2005

Kathleen Collins

Accounting Branch Chief

United States Securities and Exchange Commission

Division of Corporate Finance

100 F Street, N.E.

Washington, D.C. 20549

    Re:

    Mobility Electronics, Inc.

    Form 10-K for Fiscal year Ended December 31, 2005

    Filed March 11, 2005 (“Form 10-K”)

    Form 10-Q for Fiscal Quarter Ended March 31, 2005

    Filed May 10, 2005 (“Form 10-Q”)

Dear Ms. Collins:

     On behalf of Mobility Electronics, Inc. (the “Company”), this letter is in response to
the comments contained in the Staff’s letter (the “Comment Letter”) dated July 26, 2005,
regarding the Company’s above-identified Form 10-K and Form 10-Q filings.

     The responses set forth below correspond to the numbers assigned in the Comment Letter.

Form 10-K for the Fiscal Year Ended December 31, 2004

Note 2(c) Summary of Significant Accounting Policies

Revenue Recognition, page 44

    1.

    Disclosure on pages 2 through 6 indicates that you derive revenues primarily from the sale of
your portable computing products. However, the last sentence in your revenue recognition
policy states that ‘revenue from software and technology license fees is recognized over the
term of the respective sales or license agreement.’ Explain to us the nature of these
licensing transactions and what they include. Refer to the authoritative literature to
support your accounting.

     Response: The table summarizing the Company’s revenue by product line in Note 16 on
page 59 of Form 10-K references revenue earned from “Technology transfer fees”. These technology
transfer fees relate primarily to services provided by Company

Kathleen Collins

August 5, 2005

Page 2 of 9

engineers to customers in connection with the development of our various portable computing
products. These revenues have been recognized based on the criteria outlined in Topic 13: Revenue
Recognition, of the Codification of Staff Accounting Bulletins (Topic 13), which criteria includes:
a) persuasive evidence of an arrangement exists, b) delivery has occurred or services have been
rendered, c) the seller’s price to the buyer is fixed or determinable, and d) collectibility is
reasonably assured. For the year ended December 31, 2004, technology transfer fee revenue
represented less than one percent of consolidated revenue. In Note 11 of Form 10-Q, the Company
combined its technology transfer fee category with “Accessories and other products” as technology
transfer fees have continued to decline in significance with respect to other sources of revenue.
If technology transfer fees become more significant in future periods, the Company will modify its
revenue recognition policy footnote in future filings to indicate that technology transfer fees
relate to the provision of engineering services, and that revenue from these services is recognized
based on the criteria outlined in Topic 13.

     Prior to the disposition of the Company’s handheld software product line in September 2004,
the Company recognized software license fee revenue in connection with the licensing of software to
end-users and handheld device manufacturers in accordance with AICPA SOP 97-2, Software Revenue
Recognition. Upon the disposition of this product line, the Company no longer entered into
software license fee arrangements. All related revenue has been removed from the reported
financial statements and reported as discontinued operations (see Note 14 on page 58 of Form 10-K).
As the Company no longer engages in software licensing transactions, the Company will modify its
revenue recognition policy footnote in future filings to exclude any reference to software license
fee revenue.

    2.

    Disclosure on page 26 indicates that you offer price protection rights to certain customers.
You state that you reduce your measurements of those sales ‘and the related cost of
sales by [your] estimates of future returns and price protection.’ You further disclose
that you record an allowance for sales returns in an amount equal to ‘the difference between
the sales price and the cost of goods sold as a reduction of accounts receivable.’ Explain
your basis in GAAP, including reference to the authoritative literature, for reducing cost of
sales for returns and price protection. Also explain the methodology behind establishing an
allowance in an amount equal to gross margin. In addition, tell us why you feel it is
appropriate to record the gross margin on these transactions as an offset to accounts
receivable. In your response, provide us examples of the debits and credits you record for
these transactions and quantify the amounts recorded for each of the years presented.

     Response: The Company provides some, but not all, of its distribution channel
customers with rights to return up to 15% of their prior quarter’s purchases, provided that these
customers place a new order for equal or greater dollar value of the amount returned. Further,
these agreements generally provide that the returned product must be unused, in unopened packages,
and be comprised of products that are current and in-

Kathleen Collins

August 5, 2005

Page 3 of 9

production. Accordingly, products returned under the terms of these agreements are, by
definition, saleable products. The Company’s actual return experience was 2% of net revenue for
fiscal 2004 and 1% of net revenue for each of the first and second quarters of 2005.

     The Company also has agreements with these same distribution channel customers that allow them
to receive credit for subsequent price reductions, or “price protection.” Actual price protection
credits granted to customers were less than 1% of net revenue for fiscal 2004, as well as for the
first and second quarters of 2005.

     At the time the Company recognizes revenue, it reduces revenue for the gross sales value of
estimated future returns, as well as its estimate of future price protection. The Company also
reduces cost of revenue for the gross product cost of estimated future returns in accordance with
Paragraph 6 of FASB Statement No. 48, Revenue Recognition When Right of Return Exists (SFAS No.
48), which states “[s]ales revenue and cost of sales reported in the income statement shall be
reduced to reflect estimated returns.” Accordingly, the Company considers its revenue and cost of
revenue to be properly stated in accordance with SFAS No. 48.

     The Company records an allowance for sales returns as a reduction of accounts receivable on
its balance sheet. The reduction is equal to the sales value of estimated future returns and price
protection less the cost of revenue associated with estimated future returns, or gross margin.
Because the products that may be returned under the terms of the agreements are expected to be
saleable, the Company believes it is appropriate to reflect only the gross margin impact of
estimated future returns as a reduction to accounts receivable on its balance sheet. Further,
because the allowance for sales returns balance at each reporting period throughout fiscal 2004 and
through March 31, 2005 was no more than 1.2% of accounts receivable and 2.4% of inventory, the
Company considers the balance sheet impact to be immaterial.

     The Company will modify its disclosure in future filings to clarify its accounting treatment
for estimates of future returns and price protection.

     Following is an example, based on a hypothetical sales transaction. If the Company recorded a
sale into the distribution channel in the amount of $1,000, with a related cost of sale of $600,
and it estimated that 2% of that revenue would be subject to return, it would record the following
journal entry to reflect its estimate of sales returns in accordance with SFAS No. 48:

    Debit

    Credit

    Revenue ($1,000 x 2%)

    $
    20

    Cost of revenue ($600 x 2%)

    $
    12

    Accounts receivable – allowance for returns (gross margin)

    $
    8

    $
    20

    $
    20

Kathleen Collins

August 5, 2005

Page 4 of 9

     The following table quantifies the amounts recorded as reductions to revenue, cost of revenue
and accounts receivable in connection with the Company’s estimates for sales returns, as well as
the year end balances of the allowance for sales returns (amounts in thousands):

    Q1 2005

    FY 2004

    FY 2003

    FY 2002

    Revenue (debit)

    $
    254

    $
    1,345

    $
    1,518

    $
    (34
    )

    Cost of revenue (credit)

    122

    865

    915

    (125
    )

    Accounts receivable (credit)

    132

    480

    603

    91

    Net

    $
    0

    $
    0

    $
    0

    $
    0

    Allowance for sales returns
balance
at period end

    $
    196

    $
    183

    $
    124

    $
    211

Note 3(d) Acquisitions – Invision Software and Invision Wireless, page 50

    3.

    We note that you recorded a liability for the excess of the fair value of assets acquired
over the initial consideration paid in connection with the Invision transaction. Disclosure
in Note 3 states that the liability ‘will be reduced by future earn-out payments or reversed
to income if the earn-out criteria are not met.’ Tell us how you considered the guidance in
paragraph 46 of SFAS No. 141 in determining how to account for this liability once all
contingencies have been settled. Explain why you will not first allocate the excess liability
as a pro rata reduction of the amounts assigned to the assets acquired.

     Response: The earn-out period of the Invision Software and Invision Wireless
acquisition expires three years from the date of acquisition on December 1, 2006. Accordingly, as
the earn-out period has not expired, all reductions recorded to date to the earn-out liability
relate to actual earn-out payments. Paragraph 46 of FASB Statement No. 141, Business Combinations
(SFAS No. 141), states, “...When the contingency is resolved and the consideration is issued or
becomes issuable, any excess of the fair value of the contingent consideration issued or issuable
over the amount that was recognized as if it was a liability shall be recognized as an additional
cost of the acquired entity. If the amount initially recognized as if it was a liability exceeds
the fair value of the consideration issued or issuable, that excess shall be allocated as a pro
rata reduction of the amounts assigned to assets acquired in accordance with paragraph 44. Any
amount that remains after reducing those assets to zero shall be recognized as an extraordinary
gain in accordance with paragraph 45.” If, upon expiration of the earn-out period, an excess
liability remains, the Company acknowledges that excess liability would be properly first allocated
as a pro rata reduction of the amounts assigned to the assets acquired. The Company will modify
its disclosure in future filings to read as follows: “...which will be reduced by future earn-out
payments. If earn-out criteria are not met, the excess liability will be allocated to the assets
acquired on a pro rata basis.”

Kathleen Collins

August 5, 2005

Page 5 of 9

Note 7 Intangible Assets, page 52

    4.

    It appears that you have recorded a number of adjustments that increase/decrease the gross
values of certain intangible assets (including license fees, patents and trademarks and
software) during 2004; however, we noted no disclosures about the acquisition/disposition of
such intangible assets. In addition, we note an increase in goodwill during 2004 of $1.043
million which has been described as ‘miscellaneous direct acquisition costs’; however, we
noted no acquisitions during 2004. Describe to us the nature of the adjustments to your
intangible assets and the related accounting treatment. In addition, describe the nature of
the ‘miscellaneous direct acquisition costs’ recorded as an increase to goodwill in 2004.
Similarly address the adjustments and changes to these intangible assets and goodwill that
occurred during the first quarter ended March 31, 2005.

     Response: Although the Staff’s comment references Note 7 Intangible Assets, page 52,
the Company assumes that the portion of the comment relating to goodwill should reference Note 6
Goodwill, on page 51 of Form 10-K. Accordingly, the Company will respond to the comments relating
to Note 7 and Note 6 separately.

     Response to Note 7 of Form 10-K: The increase in intangible assets during the year
ended December 31, 2004 and the three months ended March 31, 2005 are the result of purchases of
technology and software licenses, and legal fees incurred in connection with the filing and maintenance of the
Company’s patents and trademarks. None of the increase resulted from business combinations. As a
result, the Company’s disclosures related to intangible assets are in accordance with paragraph 44
of FASB Statement No. 142, Goodwill and Other Intangible Assets (SFAS No. 142), which states “[f]or
intangible assets acquired either individually or with a group of assets, the following information
shall be disclosed in the notes to the financial statements in the period of acquisition: (a) For
intangible assets subject to amortization: (1) The total amount assigned and the amount assigned to
any major intangible asset class (2) The amount of any significant residual value, in total and by
major intangible asset class (3) The weighted-average amortization period, in total and by major
intangible asset class . . . .” During 2004, the Company disposed of its handheld software product
line. Accordingly, gross and net values of all intangible assets associated with this product line
were reduced in connection with that disposition. The impact of the disposition of the handheld
software product line on gross and net intangible assets is disclosed in Note 7 on page 52 of Form
10-K.

     Response to Note 6 of Form 10-K: The ‘miscellaneous direct acquisition costs’
totaling $1.043 million are attributable to two items:

    1)

    SEC investigation of former iGo directors and officers: During the year ended
December 31, 2004, the Company recorded $689,000 of miscellaneous direct acquisition costs
relating to legal fees incurred by the Company in connection with an SEC investigation
involving former directors and officers of iGo

Kathleen Collins

August 5, 2005

Page 6 of 9

    Corporation that was initiated prior to the Company’s acquisition of iGo Corporation on
September 3, 2002. To date, this investigation remains unresolved. SFAS No. 141 defines a
preacquisition contingency as “a contingency of an enterprise that is acquired in a
business combination accounted for by the purchase method and that is in existence before
the consummation of the combination. A preacquisition contingency can be a contingent
asset, a contingent liability, or a contingent impairment of an asset.” Accordingly, the
Company considers this SEC investigation and its related costs as a preacquisition
contingency. Further, SFAS No. 141 defines the term allocation period as “[t]he period
that is required to identify and measure the fair value of the assets acquired and the
liabilities assumed in a business combination. The allocation period ends when the
acquiring entity is no longer waiting for information that it has arranged to obtain and
that is known to be available or obtainable. Thus, the existence of a preacquisition
contingency for which an asset, a liability, or an impairment of an asset cannot be
estimated does not, of itself, extend the allocation period. Although the time required
will vary with circumstances, the allocation period should usually not exceed one
year from the consummation of a business combination.” [emph. added.] Although SFAS No.
141 states the allocation period “should usually not exceed one year from the consummation
of a business combination”, the Company considers the SEC investigation of the former
directors and officers of iGo Corporati