Could Success of Galaxy Tab Drive a 7-Inch iPad 2?

Samsung has sold 600,000 units of its Galaxy Tab slate, just one month after launching the Google Android (s goog) device. Apple (s aapl) still owns the consumer tablet market with more than 7.5 million iPads sold since June, but Samsung’s smaller slate is doing well, considering the operating system and apps are optimized for a smaller phone, not a tablet. Yet, Apple CEO Steve Jobs said last month that 7-inch tablets such as the Galaxy Tab are no good unless the user “can sand down their fingers to around one-quarter of the present size.” It sounds to me that more than half a million consumers are proving that theory wrong and I wouldn’t be surprised to see a 7-inch iPad debut next year.

To be fair, Apple typically doesn’t react to market competition. Instead, it evaluates current products in existing markets and then attempts to perfect the design and performance of such devices. That’s what Apple has done with the iPod, the iPhone and, most recently, the iPad. I suspect, however, that Rodman & Renshaw analyst, Ashok Kumar is correct, however, when he said in September that Apple is working on a 7-inch version of its iPad.

If Samsung can move 600,000 slates with a 7-inch screen at prices comparable to the 9.7-inch iPad, surely Apple can create a smaller iPad and undercut Samsung’s pricing. It wouldn’t be the first time Apple produces something that Jobs said the company would never build; in 2008, when debuting the original 13-inch MacBook Air, Jobs said 11- to 12-inch ultraportable notebooks have screens that are too small, yet the most recent MacBook Air comes in an 11.6-inch model.

I love my 9.7-inch iPad, but there’s something to be said for a smaller and lighter tablet. James recently reviewed the Galaxy Tab and found it so enjoyable of an experience to hold and use that he just ordered his own Galaxy Tab from Sprint (s s) earlier today. I haven’t even used a Galaxy Tab, but I can see the appeal because it’s lighter and easier to tote around.

What about that size issue alluded to by Jobs though? With a smaller display, Apple could easily keep the same 1024 x 768 resolution it uses for the current iPad so as not to break any existing applications; iPad apps would work on both a 7-inch and 9.7-inch iPad, in that case. If 960 x 640 resolution works on the 3.5-inch display of an iPhone and iPod touch, surely we don’t need to “sand down” our fingers to use the higher resolution display of a 7-inch iPad.

Related content from GigaOM Pro (sub req’d):