Paring is connecting to another device. When your phone is connected to a wireless Bluetooth earpiece, the phone and the earpiece are Paired.
Two phones can also be paired in order to exchange information like entries from address book or other data. And, yes, the two phones have to be close to each other for this to work (I'd say no more than 20 feet.)
You have to pair the cell phone to the one you are sending something to via Bluetooth.
After being paired,
You can send something to the other device.
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