When two devices, equipped with Bluetooth technology, come within a 10 meter range of one another, they can establish a connection. Since Bluetooth utilizes a radio-based link, it does not require a line-of-sight connection in order to communicate. 
The technology promises to simplify both communication and synchronization between devices. The technology will replace many of the proprietary cables we use in the home and office to connect devices together: telephone, printers, PDA’s, desktop and laptop machines, keyboards, joysticks – almost any device that uses the Bluetooth chip will be able to take advantage of the technology.
More than just a replacement for cables, Bluetooth wireless technology                       provides a universal bridge to existing data networks, a peripheral interface, and a mechanism to form small private ad hoc groupings of connected devices away from fixed network infrastructures.
In the future, Bluetooth is likely to be standard in tens of millions of mobile phones, PC's, laptops and a whole range of other electronic devices. As a result, the market is going to demand new innovative applications, value-added services, end-to-end solutions and much more. The possibilities opened up  are really limitless and because the radio frequency is globally available, Bluetooth can offer fast and secure access to wireless connectivity all over the world.

Bluetooth wireless technology is a de facto standard, short-range radio technology being developed by Ericsson and other companies. Bluetooth makes is possible to transmit signals over short distances between mobile PC's, mobile phones and other portable devices.
This technology achieves its goal by embedding tiny, inexpensive, short-range transceivers into the mobile devices that are available today, either directly or through an adapter device such as a PC card. The radio operates on the globally available unlicensed radio band, 2.45Ghz and supports data speeds of up to 721 Kbps, as well as three voice channels. Bluetooth devices and adapters are available for from the respective vendors and there are over 155 components & products available. From the consumer’s perspective, there are accessories in the form of Toshiba, Motorola & IBM pc cards.

Compliant radios will cost around $20 initially, eventually falling to around $5. The Bluetooth specification targets power consumption of the device from a “hold” mode consuming 30 micro amps to the active transmitting range of 8-30 milliamps (or less than 1/10th of a watt). (http://www.intel.com/mobile/bluetooth)

Devices with Bluetooth wireless technology can be set to automatically find and contact each other when within range. It delivers opportunities for rapid ad hoc connections and the possibility of automatic, unconscious, connections between devices.

Users will be alerted to, and can respond to, incoming e-mail via their mobile phone, even while their mobile PC remains in its carrying case. When the PC receives an email message, an alert will sound on the mobile phone. It is then possible to browse incoming emails immediately, reading the contents on the display of the mobile phone. Users will also be able to access the Internet via a completely wireless connection routed either through a mobile phone or a wired connection such as the PSTN, an ISDN line or LAN.

Internet connection: Talk hands-free through a headset connected wirelessly to your mobile phone, mobile computer, or handheld device. You can soon keep your mobile phone in your briefcase or pocket while using your wirelessly connected mobile computer to surf the Internet, use dial-up networking, or to send and receive an email or a fax. The same wireless access will be possible at home or in the office via a Bluetooth wall access point.

Interactive conference: Bluetooth wireless technology will revolutionize meetings, conferences, and negotiations. Without wired connections, you can use your mobile computer to share selected electronic documents, business cards, calendar appointments, and media with all or selected other participants via their mobile computers, and you can also wirelessly feed the data projector.

The Bluetooth technology was initially developed by Ericsson. Since then  a consortium of firms called the SIG group has formed. The number of companies in SIG reaches over 2400, including Intel, IBM, Lucent, Microsoft, Motorola, 3Com, Nokia and Toshiba.

At present there is no competition for this product. The Bluetooth Special Interest Group (SIG) consists of leaders in the telecommunications, computer and network industries that are driving the development of the technology and ensuring that all existing technology are compliant with this product.

For cable replacement the infra-red standard IrDA has been around for some years. They are quite well-known and have been incorporated in a lot of devices. IrDA is faster than the Bluetooth wireless technology, but is limited to point-to-point connections and above all, requires a clear line-of-sight. In the past IrDA has had problems with the incompatible standard implementations, a problem that Bluetooth has resolved via the SIG.