Definition:
Bluetooth - A short-range wireless protocol used in consumer electronics like cell phones. Bluetooth has a much shorter range and lesser capacity to transmit data than other wireless protocols like WiFi. As a result, it is mostly used for low-overhead functions.
The most common use of Bluetooth on cell phones is to enable communication between phones and wireless headsets/earpieces.
In iPhone
The iPhone does not support some Bluetooth features, such as the streaming of music to wireless speakers or headphones.
