UPDATED: Samsung's Galaxy Tab Steals Market Share From Apple, iPad Down to 77 Percent

NOTE: The article has been updated with new information at the bottom.

Apple's first move advantage with the iPad is diminishing now that the tablet has been feeling pressure for some time from a number of competing Android slates, most notably Samsung's Galaxy Tab which stole market share from the Apple tablet. Writing has been on the wall for some time. When Apple released iPad in April of last year, the industry wasn't prepared for Cupertino's trademark marketing offensive amplified with top-notch manufacturing execution.

As a result, Apple sold more than 15 million iPads in less than nine months since its release. Just in the holiday quarter Apple reported shipments of 7.33 million iPads. Disregarding Google's suggestion that vendors wait for a tablet-optimized Android version, a myriad of companies have unleashed slates powered by smartphone-optimized Android 2.2 anyway. None of them, however, have quite managed to capture customers' imagination except Samsung's seven-inch Galaxy Tab which sold two million units during its first quarter on sale.

According to a Strategy Analytics survey of the tablet market, folks seem to be picking up Android tablets in droves. As a result of this, market share dynamics is changing in Google's favor. During the holiday quarter, iPad's market share was 77 percent, Strategy Analytics said. The firm says the change files as a significant drop from 95 percent the gizmo had in the previous quarter.

In the same period of time, shipments of Android-driven tablets jumped from 100,000 units from the previous quarter - amounting to just 2.3 percent of the tablet market - to a whooping 2.1 million units in the December quarter. Strategy Analytics' director Neil Mawston opined that low cost Android tablets are successfully chipping away market share from iPad, which starts at $500:

The Samsung Galaxy Tab was the main driver of Android success. Tablet makers like Android because of its perceived low cost and an accompanying range of compelling media services such as YouTube and Google Maps.

Apple should expect further market share decline when a bunch of Android 3.0 tablets hit the market this year, including powerful Motorola Xoom, due in the first quarter, and Research In Motion's seven-inch BlackBerry PlayBook aimed at business customers using BlackBerrys.

Of course, Apple's not exactly standing still either. Mounting rumors point at a first quarter iPad 2 release, a year since the original iPad debuted. The gizmo is expected to carry a speedier dual-core processor, juicer graphics, thinner appearance, enhanced stereo speakers, back and front cameras, an SD card slot and other goodies.

UPDATE [January 31, 2010, 5:45pm Eastern]

According to the Wall Street Journal, Samsung's Galaxy Tab sales represent sell-in rather than sell-out. That is, the number of units Samsung shipped into its distribution channel - namely to carriers - rather than actual sales to end-users that a Samsung executive actually described as "quite small" in a Thursday conference call with analysts.