QuickType uses your past conversations and writing style for its suggestions. It takes into account a more casual typing style you might use in Messages and a more formal language you'll likely use in Mail. It even adjusts based on the person you are talking to.
For example, when starting a new conversation in Messages, QuickType will display the words you might start a new sentence with. ie "The", "I", or "I'm". Tap "I'm" and you will get a word commonly used next. ie. "so", "not", or "at". Tap "at" and you'll be presented with additional words that commonly follow, such as "work", "the", "least".
Notice how the word suggestions are tailored to the recipient and the topic of the conversation. If someone asks you a question, iOS 8 automatically recognizes this and offers you the ability to answer "Yes" or "No".
QuickType will initially offer predictive text in 14 countries. Those include: Australia, Brazil, Canada, China, France, Hong Kong, Italy, Japan, Spain, Taiwan, Thailand, Germany, the United Kingdom, and the United States.
Another major improvement is support for third-party keyboards. Apple is opening up the keyboard to developers meaning that you will soon be able to choose your favorite input method or layout systemwide.
The keyboards run inside a restricted sandbox by default with no network access. If that keyboards wants access to the network it can ask you to grant that access. iOS 8 will warn you that full access allows the developer to transmit anything you type, including things you have previously typed with the keyboard.
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