Once seen as world-lead­ing inno­va­tors, Hewlett-Packard and Dell are cur­rent­ly peer­ing over the abyss, with mar­ket val­ue for both firms nose­div­ing by 60 percent.

Any tech-savvy chief tech­nol­o­gy offi­cer, prod­uct man­ag­er or busi­ness devel­op­ment asso­ciate can tell why.  Both firms have missed cut­ting edge trends in com­put­er tech­nol­o­gy over the last few years, from hand-held touch­screen devices to cloud computing.

Have the ships of inno­va­tion already sailed?

Com­ment­ing on HP’s demise, ana­lyst Richard Kugele of Need­ham Research said that his firm is “deeply trou­bled” by the com­put­er behemoth’s prob­lems, iden­ti­fy­ing five key con­trib­u­to­ry factors:

1) Macro­eco­nom­ic head­winds weigh­ing on IT spend­ing (and expect­ed to con­tin­ue “well into FY13”).

2) A fun­da­men­tal shift in print­ing habits, impact­ing IPG.

3) A once-strong ser­vices busi­ness that is seek­ing to recre­ate for­mer pric­ing power.

4) A PC busi­ness strug­gling to find a place in the new tablet/ultrathin world while fight­ing off bot­tom- feeders.

5) Mak­ing lemon­ade out of the lemon Auton­o­my acquisition.

A sim­i­lar­ly griz­zly ver­dict was reached by law and busi­ness pro­fes­sor Erik Gor­don of the Uni­ver­si­ty of Michi­gan, who says, “It’s like they are both stand­ing on the dock watch­ing boats that have already sailed.  They are going to have to swim very fast just to have the chance to climb back on one of the boats.”

Why mar­ket val­ue nosedived

Let’s crunch a few num­bers.  Few would dis­pute that Apple shift­ed the whole direc­tion of com­put­er tech­nol­o­gy back in 2007 when it launched the iPhone.  Since then, HP’s mar­ket val­ue has plum­met­ed to $35 bil­lion and Dell’s has dived to $20 bil­lion.  Com­bined, this amounts to less than the $63 bil­lion Apple made from iPhones and assort­ed acces­sories in the last nine months.

A num­ber of bad deci­sions have paved the way to the brink of the abyss for these one-time giants.  HP spent over $40 bil­lion on acqui­si­tions, which have turned out to be turkeys, and Dell sim­ply seems to have ignored the touch­screen, hand-held revolution.

Dire though the cir­cum­stances are for both com­pa­nies, ana­lysts agree that they’re not insur­mount­able.  IBM made a major turn­around a few years back and is now thriv­ing and HP CEO Meg Whit­man seems deter­mined to fol­low suit.

At a recent con­fer­ence, she said, “Make no mis­take about it: We are still in the ear­ly stages of a turnaround.”