Daily Tech Snippet: Tuesday, October 27

• Reuters Exclusive: Wal-Mart seeks to test drones for home delivery, pickup: Wal-Mart applied Monday to U.S. regulators for permission to test drones for home delivery, curbside pickup and checking warehouse inventories, a sign it plans to go head-to-head with Amazon in using drones to fill and deliver online orders. The world's largest retailer by revenue has for several months been conducting indoor tests of small unmanned aircraft systems – the term regulators use for drones - and is now seeking for the first time to test the machines outdoors. It plans to use drones manufactured by China's SZ DJI. In addition to having drones take inventory of trailers outside its warehouses and perform other tasks aimed at making its distribution system more efficient, Wal-Mart is asking the Federal Aviation Administration for permission to research drone use in "deliveries to customers at Walmart facilities, as well as to consumer homes," according to a copy of the application reviewed by Reuters. The move comes as Amazon.com, Google and other companies test drones in the expectation that the FAA will soon establish rules for their widespread commercial use. FAA Deputy Administrator Michael Whitaker said in June that the agency expected to finalize regulations within the next 12 months, faster than previously planned. Commercial drone use is currently illegal, though companies can apply for exemptions.

• 'Bottomed Out' Alibaba Set for Best Month After Post-IPO Crash: Alibaba Group Holding Ltd. looks like it may be bottoming out after suffering the worst post-IPO crash ever. Shares are heading for their best month ever, and analysts have raised their sales projections in the past four weeks. Results due Tuesday are expected to show revenue growth of 27 percent in the September quarter, while in the background China’s leaders draft plans for stimulating the economy during the next five years. Chairman Jack Ma pulled off a record initial public offering as investors backed his bet on e-commerce and Alibaba catapulted to the top of the market in China. Then the domestic economy slowed to its weakest growth in 25 years, prompting the billionaire to calm investor fears that at one point erased $150 billion from its market value -- the equivalent of an International Business Machines Corp. The stock fell to a record low of $57.20 on Sept. 29, or 16 percent below its IPO price. Since then it has surged 33 percent, closing Monday at $76.35, up 1 percent for the day. That has come as at least four analysts covering Alibaba raised estimates. Sales in the September quarter are expected to be 21.4 billion yuan ($3.4 billion), with adjusted earnings-per-share of 3.44 yuan, according to estimates. New cloud-based services for merchants to reach consumers and an expansion of entertainment and local-services businesses are central tenets of Ma’s growth strategy. Increased promotions on Tmall.com and Taobao Marketplace are driving e-commerce ahead of next month’s Singles’ Day, the country’s biggest shopping event. The company also offered $4.6 billion for the rest of Youku Tudou Inc., a YouTube-like website, to add content it can stream to Internet users and to bolster revenue beyond e-commerce. Alibaba is expanding its London office to serve as its European hub and opening up in France and Germany.

• JPMorgan Chase says it is building a rival to Apple Pay: JPMorgan Chase said on Monday it will soon launch its own competitor to Apple Pay that will allow consumers to pay retailers using their smartphones in stores, and it has already won the endorsement of a major group of merchants. The largest U.S. bank is the latest company to try to profit from the prevalence of smartphones, which many financial executives believe will one day be consumers' preferred way to pay for everything from milk and eggs at the supermarket to a rental car at an airport. The companies that figure out how to convince consumers to stop pulling credit cards out of their wallets and start paying with their phones stand to earn vast sums by taking a percentage of the trillions of dollars that consumers spend annually. No clear front-runner has emerged in the business yet. Chase believes its smart phone application, known as Chase Pay, has one key advantage: the caliber of retailers it has brought on board, Gordon Smith, chief executive of the bank's consumer business, told Reuters. Chase has signed a deal with the Merchant Customer Exchange, a group of major retailers including Wal-Mart Stores Inc, (WMT.N) the largest U.S. retailer, and Best Buy Co Inc (BBY.N) to accept payments through the bank's technology. Retailers included in the Merchant Customer Exchange ring up more than $1 trillion of sales per year and have over 100,000 outlets. Rivals like Apply Pay have struggled to sign up retailers to accept their payments. In June, Reuters interviewed the top 100 U.S. retailers and found that two-thirds said they did not plan to accept Apple Pay this year. Apple Pay's website lists Best Buy in its "Coming Soon" section but has no mention of Wal-Mart. Chase signed up the Merchant Customer Exchange mainly by promising to cut retailers' costs, Smith said. Whenever a consumer pays for something with plastic, the retailer pays fees to banks and credit card networks to process the transaction. Chase is willing to accept a lower fee for Chase Pay transactions than for other transactions, and hopes to make up the difference by getting more volume over its network, Smith said.