Unlike other predictive text entry systems, LetterWise does not depend on a dictionary, allowing the user to type anything, yet with very high efficiency. Being a very simple system to use, with no multi-tap style time-outs or dictionary limitations, its instruction manual is only one sentence:
"Hit the key with the letter you want, if it doesn't come up, hit Next until it does."
- Entering the word sirs
Tap '7' once for 's'
Tap '4' once, then Next for 'i'
Tap '7' once for 'r'
Tap '7' once for 's'
One measure of performance for text entry systems is "key strokes per character" (kspc for short). Obviously, the full English PC keyboard has a kspc of 1, as you always need 1 key stroke per character you type. LetterWise has a kspc of 1.15 for English. This means that, on average you only need to hit an extra key (the key "Next") once per 6-7 letters. In contrast, multi-tap has a kspc of around 2.03 (plus some waiting for two consecutive letters on the same key). Word-based predictive systems like WordWise or T9 have an even lower kspc, however they will only allow you to enter words in their dictionary - if they fail you have to fall back to multi-tap (or to LetterWise in the case of WordWise).
Memory / Storage Requirements 
LetterWise is found on many systems with limited resources (e.g. cordless phones), where dictionary based solutions would not fit due to memory or storage constraints. In the storage space typically required for a single dictionary database (30-100kb), you can easily fit LetterWise databases for 10 - 20 different languages.
Chinese LetterWise 
The Chinese LetterWise is essentially a two-level version of alphabetic LetterWise, where you enter phonetic characters (e.g. Pinyin or Bopomofo) on the first level, and they are converted automatically to Hanzi for which you have the second level (Next Hanzi) key.
See also 
- Method and apparatus for improved multi-tap text input. US Patent 6,219,731 (2001)
- Scott MacKenzie et al.LetterWise: Prefix-based Disambiguation for Mobile Text Input 14th Annual ACM Symposium on User Interface Software and Technology (UIST), November 2001, Orlando, Florida
- How much memory does LetterWise require?
- Chinese LetterWise text entry example.