Research in Motion, the firm behind BlackBerry smartphones, revealed profits for Q2 have fallen by more than half.

The tech giant recorded net profits of $329m between May and August this year, compared to $797m in the same period last year. Meanwhile, revenue was slashed to $4.2bn, 10 percent down on the previous quarter.

According to RIM, 10.6 million smartphones, which was below the 12 million initially estimated by analysts, and 200,000 BlackBerry PlayBook tablet PCs were shipped during the second quarter, despite 500,000 tablets being shipped the previous quarter .

"Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models," said RIM co-chief executive Jim Balsillie.

Co-chief executive Mike Lazaridis added: "PlayBook is well below where we would like it to be. We believe it will be ultimately successful in a market which is rapidly growing".

RIM expects shipments to improve in Q3 and is forecasting between 13.5 million and 14.5 million smartphones will be shipped, while revenues are pegged to hit between $5.3bn and $5.6bn

However, analysts at National Bank Financial told Reuters the figures indicate the firm is losing market share.

"Our view is the company is garnering lower profitability on its service revenue, which is the monthly infrastructure fee charged to carriers based on the number of active BlackBerry subscribers," the analysts said.