Philip Morris International Launches New IQOS ILUMA i in Japan to Accelerate the Achievement of a Smoke-Free Future

Rhea-AI Summary

Philip Morris International Inc. (PMI) celebrates the 10-Year Anniversary of IQOS with the launch of IQOS ILUMA i, the latest addition to its smoke-free products. The company aims for over two-thirds of its revenue to come from smoke-free products by 2030. IQOS has surpassed Marlboro in net revenues, leading to a decline in cigarette sales in many countries. IQOS ILUMA i features advanced technology and offers a clean, seamless, and flexible experience for adult smokers.

Insights

Market Research Analyst

The introduction of the IQOS ILUMA i by Philip Morris International represents a significant milestone in the company's strategic shift towards smoke-free products. This move underscores the broader industry trend where traditional tobacco companies are diversifying their portfolios to include reduced-risk products amid increasing regulatory pressures and changing consumer preferences. The claim that IQOS ILUMA i emits 95% lower levels of harmful chemicals compared to cigarettes could strengthen PMI's market position, potentially leading to increased market share in the heat-not-burn (HnB) category.

From a market perspective, PMI's target of having over two-thirds of its total net revenue come from smoke-free products by 2030 is ambitious. Achieving this goal could result in a significant transformation of its revenue streams, reducing dependency on traditional cigarettes. The rapid adoption of IQOS in markets like Japan, where it has reportedly become the number one international nicotine brand, indicates a strong consumer shift towards HnB products. This shift could have a ripple effect on competitors, possibly sparking further innovation and investment in the smoke-free sector.

Financial Analyst

Financially, the milestone of IQOS net revenues surpassing those of Marlboro is a testament to the product's commercial success and indicates a substantial change in consumer behavior. For investors, the performance of IQOS will be a critical factor to watch, as it could serve as a leading indicator of PMI's future financial health. The company's investment in research and development, as highlighted by the CEO, suggests a commitment to maintaining a competitive edge, which could be favorable for long-term growth.

It is also noteworthy that PMI has achieved a situation where smoke-free product revenues exceed 50% of total net revenue in 25 markets. This diversification could potentially mitigate business risks associated with traditional tobacco sales and align PMI with evolving regulatory landscapes. However, investors should consider the substantial capital required for such R&D and market expansion, which may affect short-term profitability but could be justified if the long-term shift towards smoke-free products continues.

Medical Research Analyst

The health implications of the shift towards smoke-free alternatives like the IQOS ILUMA i are significant. The claim of a 95% reduction in harmful chemical emissions, if substantiated, could suggest a reduced health risk for users compared to traditional smoking. This could potentially influence public health policies and regulatory frameworks globally. The role of government and regulatory bodies, as mentioned by the CEO, is indeed crucial in determining the success of such products. Regulatory endorsements or restrictions can have a profound impact on the adoption rates and market penetration of HnB products.

For the medical community, the long-term health effects of these products remain a subject of ongoing research. While the immediate reduction in harmful emissions is a positive step, comprehensive studies are needed to understand the full spectrum of health outcomes associated with prolonged use of HnB products. Such data will be vital for stakeholders, including healthcare providers, regulators and consumers, to make informed decisions.

Celebrates the 10-Year Anniversary of IQOS & Looks Forward to the Next Ten

LAUSANNE, Switzerland--(BUSINESS WIRE)-- Philip Morris International Inc. (PMI) (NYSE: PM) today announced the launch of IQOS ILUMA i, the latest and most innovative addition to its growing portfolio of smoke-free products for adults who would otherwise continue to smoke or use nicotine products. Today, this range of better alternatives to cigarettes includes multiple generations of IQOS, the No. 1 tobacco heating system.¹ The launch also marks the 10-Year anniversary of IQOS, originally launching in Nagoya, Japan in 2014.

“We leverage science, world leading brands and commercial capabilities to provide better alternatives to our consumers. This anniversary provides an opportunity to renew our smoke-free vision and our ambition for over two-thirds of our total net revenue to come from smoke-free products by 2030,” said PMI CEO Jacek Olczak. “IQOS ILUMA disrupted the category by introducing induction-heating technology that heats tobacco from within, to provide a consistent taste experience, no tobacco residue, and no need to clean the device. Today, we take IQOS to new heights, with the launch of IQOS ILUMA i—the latest innovation in our smoke-free portfolio, offering a range of advanced features for a clean, seamless, and more flexible experience.”

Over the past 10 years, PMI’s portfolio of scientifically backed smoke-free alternatives, led by IQOS, has created a positive impact on millions of adult smokers and those around them by accelerating an end to cigarettes. Within 10 years, IQOS net revenues have surpassed those for Marlboro, making it the number one international nicotine brand and accelerated the decline of cigarettes in many countries. In Japan, for example, nearly one-third of adult smokers are using IQOS² and cigarette sales have declined much more rapidly since heated tobacco was launched. Today, there are 25 markets where PMI’s smoke-free product revenues exceed 50% of total net revenue, including Bulgaria, Czech Republic, Denmark, Greece, Italy, Poland, and Romania.

“IQOS ILUMA i is our most innovative offering to date and the new flagship in our portfolio of scientifically substantiated, heat-not-burn smoke-free systems,” said Bertrand Bonvin, President Heat-Not-Burn Platforms at PMI. “Like previous IQOS devices, it emits, on average, 95% lower levels of harmful chemicals compared with cigarettes.^3,4 We are proud that consumer feedback continuously fuels our innovation, and IQOS ILUMA i is a testament to that.”

Olczak added: “We have been investing heavily in research and development to provide adults who smoke with better alternatives to cigarettes based on cutting-edge science. But for change to be effectively enacted, government and society at large must play their part. It is important that others—like government authorities and regulators—embrace the opportunity offered by innovation and science to benefit the world.”

IQOS ILUMA i features

The IQOS ILUMA i series offers three devices in Japan: IQOS ILUMA i PRIME, IQOS ILUMA i and IQOS ILUMA i ONE. All three devices bring a range of adaptable new features. It already delivers an experience that is clean, seamless, and pleasurable thanks to PMI’s bladeless SMARTCORE INDUCTION SYSTEM^TM in a variety of designs to meet the diverse preferences of consumers.

The new touch screen on the device’s holder allows users to see experience-relevant information quickly and easily. To personalize the experience, IQOS ILUMA i introduces a new Pause Mode. By swiping up or down on the touch screen, users can pause and resume their smoke-free moment where they left off⁵, without worrying about wasting a stick. Additionally, FlexPuff allows users to enjoy the experience at their pace⁶.

The new IQOS ILUMA i additionally includes smart features like FlexBattery that help prolong the lifespan of the holder’s battery⁷, contributing to electronic waste reduction, as part of our efforts to reduce the environmental impact of our products. Furthermore, the door for IQOS ILUMA i is made from aluminum produced with renewable energy and the inner textile layer of IQOS ILUMA i’s PRIME leather-like wrap is made of 100% recycled plastic.

Further information on IQOS ILUMA i, its features, and additional important information can be found on https://www.IQOS.com.

Philip Morris International: Delivering a Smoke-Free Future

Philip Morris International (PMI) is a leading international tobacco company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, PMI has invested $12.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioural research, as well as post-market studies. In 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. The U.S. Food and Drug Administration has authorized versions of PMI’s IQOS Platform 1 devices and consumables and Swedish Match’s General snus as Modified Risk Tobacco Products. As of December 31, 2023, PMI's smoke-free products were available for sale in 84 markets, and PMI estimates that approximately 20.8 million adults around the world had already switched to IQOS and stopped smoking. Smoke-free products accounted for approximately 37% of PMI’s total full-year 2023 net revenues. With a strong foundation and significant expertise in life sciences, PMI announced in February 2021 its ambition to expand into wellness and healthcare areas and, through its Vectura Fertin Pharma business, aims to enhance life through the delivery of seamless health experiences. For more information, please visit www.pmi.com and www.pmiscience.com.

¹ Source: PMI global estimate of total In-Market Sales of Heated Tobacco Units as of June 2023.

² HTU city offtake share [Q3, 2023] of total cigarettes and HTUs. Source: PMI Financials or estimates.

³ Important information: It does not necessarily equal a 95% reduction in risk. IQOS is not risk-free and provides nicotine, which is addictive. Only for use by adults.

⁴ ”95% less” represents the average reductions in levels of a range of harmful chemicals (excluding nicotine) compared to the smoke of a reference cigarette (3R4F). See Important Information on www. iqos.com.

⁵ Only available in Performance Mode, during the first 3 minutes or 8 puffs of the experience. When pause is activated, Performance Mode gives you up to two consecutive experiences and pause is available only for one of them.

⁶ FlexPuff activation and number of puffs depend on individual usage patterns, thus extra puffs might not apply to all adult consumers and/or experiences. FlexPuff does not activate when pause is used.

⁷ Only when fully used on Eco Mode throughout the lifespan of the holder and may vary depending on personal consumption.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240313137812/en/

Philip Morris International

For media enquiries and visual selects, please contact:

Bryson W. Thornton

+41 (0) 58 242 4500

Bryson.Thornton@pmi.com

Blaine Dodds

+41 (0) 58 242 4500

Blaine.Dodds@pmi.com

Source: Philip Morris International

FAQ

What is the latest addition to Philip Morris International Inc.'s smoke-free products portfolio?

The latest addition to Philip Morris International Inc.'s smoke-free products portfolio is IQOS ILUMA i.

When was IQOS originally launched?

IQOS was originally launched in Nagoya, Japan in 2014.

What is the company's revenue goal for smoke-free products by 2030?

The company aims for over two-thirds of its total net revenue to come from smoke-free products by 2030.

How has IQOS impacted cigarette sales in Japan?

In Japan, nearly one-third of adult smokers are using IQOS, leading to a more rapid decline in cigarette sales since heated tobacco was launched.

What are some features of IQOS ILUMA i?

IQOS ILUMA i features the bladeless SMARTCORE INDUCTION SYSTEMTM and a new touch screen on the holder, allowing users to personalize their smoke-free experience with a Pause Mode.