Mobile Handshake

Bluetooth also can be useful when people are traveling for business. It's possible to access the Internet on a laptop even when there's no Wi-Fi hot-spot available by pairing a Bluetooth-enabled cell phone and laptop to create a wireless broadband connection. "It's a good way to access a cellular network without buying a dedicated modem for your computer," says Avi Greengart, an analyst at Current Analysis.

Security Setbacks

But Bluetooth technology comes with a long history of security issues. Devices are subject to attacks like "Bluejacking," where unsolicited messages are sent to phones. Additionally, Bluetooth sniffers can be used to record Bluetooth transmissions and recover the user's PIN.

Still, the security issues are often overhyped. Bluetooth is subject to the same security flaws as unencrypted Wi-Fi networks. It all comes down to the users, who have to be aware that they can't leave Bluetooth on or in "discovered mode," when a device is most vulnerable to attacks, says Michael Disabato, a Burton Group analyst.

Organizations such as the Bluetooth Special Interest Group are working to improve security. The group holds UnPlugFests, where manufacturers test their Bluetooth devices for interoperability before they're released on the market. Over the past couple of years, security experts and hackers were brought in to find security flaws in Bluetooth products. Their tests have shown that Bluetooth, which uses 128-bit keys for encryption, is a secure technology. It's the user implementation that needs to improve.