Philip Morris presents new versions of iQOS cigarettes to increase sales
With iQOS 3, like older models, users have to put the device back in the case to recharge each time they use it. The new iQOS 3 Multi can be used 10 times before it needs to be recharged. It is bulkier than the traditional iQOS device, but executives say that consumers have also requested this change.
"In today's world, you need to update the product and integrate the consumer's feedback and insights," says CEO Andre Calantzopoulos in an interview with CNBC. "So for people who have been with the current version of iQOS, it's obviously time that we have something new. But the main goal here is also to convince more people in Japan and around the world to swap cigarettes and to iQOS … "
Calantzopoulos said to introduce iQOS 3 Multi eliminates competitors' advantage. Some brands, including British American Tobacco's Glo and KT & G, Lil, advertise themselves as superior to iQOS because they can be used multiple times without requiring a cost, he said.
In Japan, PMI will introduce HEETS, a cheaper series of heatsticks for iQOS devices in an effort to show consumers who may have felt the switch from cigarettes to iOS, was too expensive. only Marlboro-branded heatsticks available in Japan. In addition to HEETS, Japan makes the first market to offer both a premium and a drop in value.
PMI originally planned to introduce HEETS in the first quarter of next year, but boosted its launch as growth has begun to cease.
Japan has been a successful market for PMI that it has become part of a proxy for the company's prospects of turning against non-smoking products and new revenue streams. When PMI said in April that Japan's growth was "plateaued", the company's stock market went down 1[ads1]6 percent to the worst day since Altria's spin in 2008.
PMI shares have risen almost 5 percent the last week after showing progress in most IQOS markets in the third quarter.
Leaders said they expected sales to slow at a time when they converted early adopters and innovators, but had not attracted older, more traditional cigarette smokers. They hope the new products will appeal to existing existing iQOS users and new ones.
In the third quarter, iQOS took 15.5 percent of the entire tobacco market in Japan, up from 11.9 percent the year before, but slightly down from 15.8 percent in the first quarter of this year. In Korea, iQOS represented 7.4 percent in the third quarter, up from 2.5 percent from last year, but only slightly higher than 7.3 percent in the first quarter of this year.
Calantzopoulos said that investors can expect to see how New Devices affect the company's financial performance by the end of the first quarter of next year.
PMI is waiting for a decision by the Food and Drug Administration if it can sell iQOS in the United States. If approved, the device will not be the new one.
