Interesting Reuters article on Japan Tobacco found
HERE.
Notice that Japan Tobacco expects the market share of heat-not-burn products to nearly double again in 2018 over 2017, growing from about 16% of the market in 2017 to 29% in 2018. Due to that, they expect their sales of combustible cigarettes to drop another 16% in 2018, after falling 12.5% in 2017.
Those estimates are truly astounding. Nearly 1/3 of all smokers in Japan will be converted to heat-not-burn this year. Frankly, regardless of what the FDA decides about IQOS right now, the massive human trials are already being conducted in Japan. If Japan starts showing significant health improvements with that many people switching, the pressure to approve it in the US will be immense.
Note also the article estimates that PM currently has a 76.2% share of the heat-not-burn market in Japan, with the remaining 23.8% split pretty evenly between BAT and JT.
The competition obviously has to ramp up to try and slow the gains that IQOS is seeing, and JT is spending nearly $1 billion to do that. Nevertheless, PM's first mover advantage and several year head start in R&D and capacity building is likely to strongly benefit them for a while yet.
While PM starts from a much higher market share level in combustible cigarettes in much of Europe, if they are able to match even a fraction of that IQOS growth in the EU, profit growth should be very high for the next several years.