People who smoke can’t quit cigarettes, and it is ironically killing Philip Morris

Philip Morris plunges the most in a decade as they struggle to get their ol' faithfuls to move with them into the e-cigarette future.


April 20, 2018

Yesterday, Philip Morris International’s shares plummeted almost 18% — their lowest in a decade — after sales of their new flagship device to make smoking “healthier” slowed in Japan.

The device is called iQOS and, according to CNBC, it’s a heat-not-burn product that warms tobacco to a temperature high enough to emit an aerosol, but not high enough to cause combustion — one of the processes that makes smoking OG cigs so harmful.

Putting all their cigarettes in one carton

With fewer and fewer people bangin’ heats these days, PM has long looked to move beyond cigarettes — that’s where iQOS comes into play. 

Or so they thought — the product, available in more than 30 markets, proved to be a massive hit in Japan last year, causing the company to double down on production.

But this quarter, sales for the iQOS plateaued, proving it may be harder to get their power customers to quit traditional cigarettes than they thought.

Turns out, cigarettes are addictive

In the wake of history repeating itself, the booming vape industry led by Juul has the nicotine-interested youth in the palm of their hands. 

Philip Morris converted as many young people as they could, but if they want to get a leg up, they need to convince their main cohort —  the 50+ crowd that clung to the Marlboro man in the first place — that a hot new gadget is better than what their horseback-hero smoked.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.