Philip Morris Targets IQOS Launch in Two US States

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Philip Morris Targets IQOS Launch in Two US States

Philip Morris International (NYSE: PM) plans to launch its flagship heated tobacco device, IQOS, in two U.S. states in 2024. This move signifies the company’s significant shift away from traditional cigarettes toward smoke-free alternatives.

U.S. Market Entry Strategy

The U.S. Food and Drug Administration has authorized PMI to market IQOS as offering reduced exposure to harmful chemicals. However, the World Health Organization states there is currently no evidence showing heated tobacco products like IQOS are less harmful than cigarettes.

Strategic Shift Toward Smoke-Free Products

Philip Morris aims for over two-thirds of its net revenues to come from “smoke-free” products by 2030, up from 50% by 2025. Establishing a strong presence in the United States is critical to PMI’s plan to shift to cigarette alternatives.

Key Acquisitions and Focus

PMI had no presence in the U.S. prior to the acquisition of oral nicotine company Swedish Match in 2022. They are now gearing up for a 2024 launch in two unnamed U.S. states.

Impact on Business Strategy

PMI initially planned to transform into a broader health and wellness company, including the acquisition of asthma inhaler company Vectura. However, setbacks have prompted the company to reprioritize resources behind IQOS and nicotine pouch brand ZYN. They have shifted their focus to being a global leader in the nicotine category.

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