IQOS: The "Heat-Not-Burn" Game Changer in E-Cigarettes

Phimmo International's IQOS brand has introduced the concept of "heat-not-burn" for the first time, leading the development of electronic cigarettes in a new direction.

IQOS faces obstacles in its development in the United States as it gets embroiled in a legal battle with BAT over alleged patent infringement.

In 2016, IQOS was launched for the first time in Italy and Japan but faced obstacles in its development in the United States.

Philip Morris International (PMI) has established its first factory in Italy, following successful initial developments in Italy and Japan, and has launched IQOS in the UK. PMI has collaborated with several international companies over the years and sold IQOS products under various brand names. However, it has proven to be more challenging to penetrate the US market.

In 2020, the FDA approved the IQOS product for "significantly reducing exposure to harmful or potentially harmful chemicals," prompting PMI to launch the product in the United States. After gaining a small share of the overall market by introducing IQOS in a few states, PMI faced a setback as a result of an intellectual property infringement claim brought by Reynolds American Inc.'s (RAI) parent company, British American Tobacco (BAT), which resulted in the closure of IQOS in the US market.

In September 2021, the International Trade Commission (ITC) upheld its preliminary ruling from May 2021 that IQOS had infringed on two RAI patents. The ITC has banned PMI's then-partner Altria Group from importing PMI's IQOS 2.4, IQOS 3, and IQOS 3 Duo products into the United States.

In order to bring its product IQOS back to American stores, PMI has announced plans to manufacture IQOS in the United States starting in early 2022.

In October 2022, PMI agreed to pay approximately 2.7 billion dollars to Altria Group for exclusive commercial rights to the IQOS tobacco heating system in the United States starting from April 20, 2024.

PMI announced that they plan to reintroduce IQOS for sale in the United States in the first half of 2023.

The global market share of IQOS is gradually increasing.

IQOS, a product developed by Philip Morris International (PMI), has been launched in 68 international markets overseas. PMI has claimed that "almost 13.5 million adult smokers have switched from traditional tobacco products to IQOS.

PMI's heated tobacco products are now available in several countries and regions, including Albania, Andorra, Armenia, Aruba, Austria, Bahrain, Bosnia and Herzegovina, Bulgaria, Canada, the Canary Islands, Colombia, Costa Rica, Croatia, Curaçao, Cyprus, the Czech Republic, Denmark, the Dominican Republic, Egypt, Estonia, France, Georgia, Germany, Greece, Guatemala, Hungary, Iceland, Italy, Israel, Japan, Jordan, Kazakhstan, South Korea, Kuwait, Kyrgyzstan, Lebanon, Latvia, Lithuania, Malaysia, the Maldives, Mexico, Moldova, Monaco, Montenegro, Morocco, the Netherlands, New Zealand, North Macedonia, Norway, Palestine, the Philippines, Poland, Portugal, Réunion, Romania, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, the United Arab Emirates, the United Kingdom, and Uzbekistan.

In November 2002, PMI launched the new product IQOS Iluma Prime in Dubai duty-free.

In 2018, PMI opened its first "IQOS boutique" in Sofia, Bulgaria.

In 2021, PMI introduced IQOS for sale in duty-free stores in Japan and Switzerland.

In 2022, PMI launched the IQOS tobacco stick blends in a pilot market in the Philippines.

In 2023, PMI plans to further commercialize the IQOS brand products.

According to data from PMI, the tobacco sticks for IQOS equipped with "bladeless" resistance external heating technology in the Blends product emit 95% fewer harmful chemicals compared to traditional cigarettes.

A new round of growth in the market for IQOS, the heat-not-burn device, is on the horizon.

Reference: Norm Bour: The Long Road.