By Josh Ong

Published: 06:35 AM EST (03:35 AM PST)

Despite posting impressive sales of the iPad last quarter, Apple saw its tablet market share drop from 95 percent to 77 percent as shipments of Google Android-based tablets chipped away at the company's tablet dominance, a new report says.

Sales of the first competitors to Apple's iPad have begun to take off, resulting in the market share for tablets running the Google Android mobile OS increasing nearly tenfold in the December quarter, said research firm Strategy Analytics on Sunday.

Last quarter, the firm reported that Apple held a dominating 95 percent of the tablet market, with Android tablets representing just 2.3 percent of the market.

Apple reported record sales of 7.3 million iPads in the December quarter, while Android shipments jumped from just 100,000 units to 2.1 million, according to the report.

"The Samsung Galaxy Tab was the main driver of Android success,” said Neil Mawston, director at Strategy Analytics. “Tablet makers like Android because of its perceived low cost and an accompanying range of compelling media services such as YouTube and Google Maps.”

In November, Samsung revealed that sales of the Galaxy Tab had reached 600,000 in the first month of availability. Last week, Samsung announced that it had sold 2 million tablets in the fourth quarter.

Update: Samsung has admitted that its "sales" figures for Galaxy Tab are actually inventory channel stuffing and do not represent real sales to consumers.

Apple will face even stiffer competition later this year when Motorola and Research in Motion launch tablets of their own. The Motorola Xoom, which was "not completely done" when it was demoed at the Consumer Electronics Show earlier this month, is scheduled for a first quarter release. A purported leak from Verizon's internal inventory system suggests that the Motorola Xoom could debut for as much as $799.99.

BlackBerry maker RIM is working on the PlayBook 7-inch tablet, which is also set to launch by the end of the first quarter. A recent survey by Royal Bank of Canada analyst Mike Abramsky indicated that prelaunch interest in the PlayBook is well behind that of the iPad. Another analyst has alleged that RIM is struggling to extend the PlayBook's battery life beyond just a "few hours," though the Ontario-based smartphone maker has denied the claims.

For its part, the Cupertino, Calif., iPad maker has not been resting on its laurels. Numerous reports have emerged suggesting that production of the second-generation iPad will begin in February for a possible April launch. A recent analyst report claims that Apple is focusing on "thickness and anti-reflection, not resolution" for the next iPad. According to the report, Apple will also include a dual-core processor, upgraded graphics processor, and more RAM.