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Before we get into the details of Documents in the Cloud, let’s define what it is (and what it isn’t), at least as of the Fall of 2011, when I’m writing this.
• What it is: A good way to work on iWork documents between iOS devices and (to a lesser extent) your Macs. As you work on an iWork document on iOS, it is, like all iOS documents, automatically saved in a mysterious location that you don’t have explicit access to (because iOS hides the file system from the user). When Documents in the Cloud is enabled, iCloud automatically pushes the latest version to your other iOS devices, though you must manually download the changed version to your Macs from iCloud.com. Since the concept of a file system is foreign to iOS (each program has its private “bucket” of documents), we’ll eventually have to see some standardized way that programs with both Mac and iOS versions can access the same files, but that doesn’t exist yet.