In 2014, Philip Morris International (PMI), a leading global cigarette and tobacco company headquartered in New York, the US, launched iQOS in Nagoya, Japan, and Milan, Italy, as a pilot project. iQOS was a rechargeable electronic device that heated tubes of tobacco called HeatSticks, as opposed to the burning of tobacco that took place in conventional cigarettes. These HeatSticks resembled a cigarette cut in half. Japan was chosen as the main market for the pilot project, as global tobacco companies perceived Japan as a perfect test ground for ‘Heat but not burn’ (HnB) tobacco products, since e-cigarettes, which used nicotine-laced liquid, were not allowed under the country’s pharmaceutical regulations.

The declining trend in smoking in developed countries had put the tobacco industry under serious pressure in the last decade. Global cigarette consumption was annually dropping by 2-2.5 percent. In an effort to reinvent itself, Philip Morris, maker of the popular Marlboro brand, decided to expand sales of what it called ‘reduced-risk products’ to 35 countries by 2017. The launch of iQOS was the first step toward this objective. Compared to cigarettes, HeatSticks also had the advantage of countries taxing them at a lower rate. “We are more confident than ever that these products have the potential to fundamentally transform our business,” said Calantzopoulos.

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