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A New Generation Of Star Products Will Be Launched Next Week, And IQOS Will Become A ’life-saving Straw’ For Philip Morris International.
Nov 14, 2018

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Philip Morris International (hereinafter referred to as Philip Morris International, stock code: PM), the world's largest tobacco company, recently held a press conference in Tokyo, Japan, and announced the launch of a new generation of non-burning electronic cigarette products IQOS 3.0 and IQOS 3.0 Multi. On November 15th (next Thursday), the new generation of IQOS will be launched in nine exclusive stores and official websites in Japan.

In the context of the increasingly severe global tobacco control situation, the heating and non-combustion of electronic cigarette products represented by IQOS has become a “life-saving straw” for Philip Morris International and the entire tobacco industry. Research institutions believe that the new generation of IQOS is expected to continue to be sought after by consumers, and the growth potential of the e-tobacco market will be great in the future.


iPhone in the electronic cigarette industry


When IQOS was first listed in Japan, it caused a long queue of consumers to buy, and the store repeatedly appeared out of stock, and even needed to queue up in the early morning to buy. This time, the new product is listed, and the external forecast is still "a difficult to find a cigarette."


The IQOS 3.0 announced at the Philip Morris International Press Conference was sold for 10.98 million yen and the IQOS 3.0 MULTI was 8980 yen. At present, only a small number of customers who are invited to the press conference have a set of two PR trial versions. Before the official release, a small number of public relations trial versions have appeared on Japanese second-hand websites, and a set of two has been fired at a high price of about 120,000 yen.


The IQOS has three main components: a cartridge, a heater, and a charger. The cartridge is a specially treated tobacco leaf that is inserted into the heater during use to release the smoke for the user to smoke, and the entire process does not produce combustion. Charge the heater with a matching charger after each use. It is particularly worth mentioning that the IQOS special cartridge retains nicotine, removes the smoke tar, and the smoking experience is similar to that of traditional cigarettes and reduces the hazard. After inserting the special cartridge into the specially developed heater, the tobacco leaves are baked at a temperature of more than 300 degrees. Without high temperature open flame, no smoke tar will be produced, and the taste of the smoke is completely intact.


Some media commented that IQOS is called the "iPhone" in the e-cigarette industry. The products work with texture and function leading the whole industry. Like the iPhone, IQOS has a lot of peripherals that are enough to make the fans "hands-on".


The upcoming IQOS 3.0 will be opened by the position of the hand, and the cover will become less susceptible to breakage. Cylindrical cartridge heaters are cleverly magnetized and can be removed from a variety of angles. The charging time of the cartridge heater was also shortened from 4 minutes in the previous generation to 3 minutes and 30 seconds. The IQOS 3.0 Multi is called the “Super One”, and it is also a model that can smoke continuously. The whole body is amazingly light and light. In the "full power" state, this model can continuously smoke ten cigarettes.


Good news from the FDA


Philip Morris International currently sells IQOS products in more than 30 countries, but does not include the US market. Although Philip Morris International submitted its application for listing in the US at the end of 2016, the US Food and Drug Administration (FDA) has been questioning whether e-cigarette products are “safer” and “transformed to reduce the risk of tobacco-related diseases”. Heart doubts.


Philip Morris International CEO Andre CalantzopoulOS recently predicted that the US Food and Drug Administration (FDA) is expected to release IQOS this year. If all goes well, IQOS may become the first FDA-approved e-cigarette product.


At the beginning of this year, the FDA advisory group provided conditional support for Philip Morris International's "IQOS greatly reduced physical exposure to harmful or potentially harmful chemicals" and "equipment heating tobacco but not igniting". Although the FDA does not have to fully follow the advice of the advisory group, the usual practice is to do so.


Recently, the FDA announced the results of the 18-month IQOS health impact study. The data shows that IQOS caused a "significant reduction" in lung tumor formation in the subject (mouse) compared to conventional cigarettes. According to the study, the carcinogenic potential of aerosols emitted by IQOS is “significantly lower than cigarette smoke” by studying the effects of different concentrations of aerosols in heated, non-burning e-cigarettes, traditional cigarette smoke and fresh air. The FDA said the results of the above study are part of a package of evidence that regulators can determine whether IQOS can be labeled as "lower risk than traditional cigarettes." The FDA has not yet weighed the results.


Amazing market growth potential


The current global tobacco control situation is clear, the traditional cigarette business has clearly entered the downward range, smoking, smoking and smoking are all falling, and global tobacco companies are facing severe challenges.


After the tens of billions of dollars in research and development, Philip Morris International launched IQOS. Philip Morris International even put the product on the cover of the annual report with "this changes everything" (this will change everything). Analysts said that IQOS is the future of Philip Morris International. The company took the initiative to come up with a "destructive" innovation, proactively let consumers give up traditional cigarettes, not only "breaking their own way", but also "broken other tobacco companies." The road to life." IQOS has become an "explosive" product for e-cigarettes and is currently the most widely sold, non-combustible electronic cigarette product in the world.


Philip Morris International's 2017 annual report shows that IQOS users have grown from 1.4 million in 2016 to more than 4.7 million in 2017, an increase of more than 235.7%. In 2017, the total volume of IQOS special cigarettes was 36.2 billion, while the corresponding shipments in 2015 and 2016 were 396 million and 7.4 billion, with a compound annual growth rate of 121.2%.

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Forbes recently published an article saying that the probability of global smokers turning to IQOS is expected to increase significantly in the future, accounting for about 70% to 90%. The reason is mainly due to two aspects. First, IQOS can significantly reduce harmful chemicals in traditional cigarette smoke. To date, more than 20 government reports and research reports have shown that IQOS produces significantly lower levels of toxicants than traditional cigarettes; second, IQOS reduces smoking hazards. Can retain the taste of real smoke. The article also pointed out that according to the World Health Organization, by 2025, there will be more than 1 billion smokers worldwide. Due to the huge demand for tobacco products in the future, it is imperative to develop alternatives that are less harmful than traditional cigarettes.


Some research institutes say that the global e-cigarette consumers account for less than 2% of the smokers, and the market space is amazing in the future. In 2015, the e-cigarette market will be 8 billion U.S. dollars, and will reach more than 48 billion U.S. dollars in 2030. Goldman Sachs, a Wall Street investment bank, also released a report predicting that by 2020, traditional cigarette substitutes based on e-cigarettes will account for more than 10% of the total cigarette industry sales and 15% of profits.

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