�Thomas Mulier, Sam Chambers, and Dan Liefgreen
Analysts say it could be more successful because it gives a better nicotine buzz than an e-cigarette and imit imitates the ritual of smoking. Sales of e-cigarettes are only about 1 perc percent of the $863 billion tobacco ma market, according to researcher E Euromonitor International. Analysts at Wells Fargo predict t that Philip Morris’s Heatsticks c could displace as much as 3 30 percent of cigarette sales in developed markets by 2025. BritishBri American Tobacco aims to start selling a similar product in the second half of 2016; Reynolds American is developing a heating device, though it reported that one tested in Wisconsin last year didn’t meet performance expectations; and Japan Tobacco is introducing a vaporizer called Ploom Tech. But Philip Morris is far ahead of the competition, says James Bushnell, an analyst at Exane BNP Paribas. “This is the closest yet that the industry has got to the holy grail of a commercially successful ‘safe’ cigarette,” he wrote in a recent report.
In Japan more than 100,000 smokers have switched to IQOS, and Philip Morris says Heatsticks accounted for 2.4 percent of the Tokyo cigarette market in January. Philip Morris says it will sell IQOS in about 20 countries this year, and it plans to submit an application to the U.S. Food and Drug Administration to call the device a modified-risk tobacco product, though the FDA hasn’t yet given the go-ahead to similar requests.
Philip Morris created the “embassies” to promote IQOS, given bans on tobacco advertising in many countries. Reminiscent of Nestlé’s Nespresso shops, the embassies organize events for IQOS users to socialize and spread the word. “We’re expanding our marketing toolbox,” Miroslaw Zielinski, head of the tobacco company’s “reduced-risk” business, said in a webcast in February. “This has been undeniably a much more complex undertaking than cigarette marketing.”