Some disturbing news for Firefox fans — for the first time ever, the browser’s market share dropped, to 8.07 percent in July from 8.71 percent in June. At the same time, IE market share grew by the same amount, to 87.20 percent in July from 86.56 percent last month.

Why the slippage? There are several reasons, I think. There are an increasing number of Firefox vulnerabilities being discovered — and updating Firefox on your PC can still be kludgy. Add to that the publicity surrounding the upcoming IE 7, which will have Firefox features like tabbed browsing, and there’s a clear reason why some people are turning away from Firefox.

This may not be a temporary blip. The release of IE 7 will present a major challenge to Firefox.

If Firefox is to regain momentum and gain more market share, it’s going to have to figure out a better way to update software on PC, and it’ll also have to come out with compelling new features as well. Tabbed browsing by itself won’t cut it any more, once tabs hit IE.

What features do you think Firefox needs added? Let me know, below.

What features does Firefox need to add in order to compete with IE 7?