I work at ZAGG and thought I could shed some light on this. Unfortunately, this is a "feature" built into the iPad software. Whenever an external keyboard is attached, including Apple's keyboards, the auto cap turns off. The auto "." shortcut gets disabled as well. This could change on any future ios upgrade, but at the moment, we can't make the iPad do something it wasn't designed to do. This goes for us adding unique hotkeys, like an app switch button, or the use of a bletooth mouse. Again, Apple may change this someday, but for now, this is what we have.