AirDrop and Instant Hotspot in iOS 8 and OS X Yosemite: Explained
While perhaps not as new and sexy as Handoff, making or taking calls, or sending and receiving SMS/MMS, the final two Continuity features in iOS 8 and OS X Yosemite will absolutely make life easier for anyone with an iPhone and/or iPad and Mac. And that's the new, cross-compatible AirDrop and the new, Instant Hotspot. So, how do they work?
AirDrop between everything Apple
AirDrop started off on OS X Lion back in 2011. It used Bonjour (zero config) and personal area networking (PAN) to discover and transfer files between Macs, and eventually made its way from the Finder to the Share menu and Open/Save dialogs. Where it didn't find its way was on to iOS.
At least not until iOS 7.
When AirDrop did come to iOS, however, it came in name only. The protocol itself was significantly different. With no Finder in iOS, AirDrop existed only in the Share sheet. Instead of Bonjour and PAN, it used Bluetooth LE and direct Wi-Fi to transfer data. It was an incredibly secure implementation but it wasn't compatible with the older version on OS X.
At least not until iOS 8 and OS X Yosemite.
How the new AirDrop works
OS X AirDrop, like iOS before it, now uses Bluetooth LE for discovery and direct Wi-Fi for transfer. That's really the best of both worlds, as you get the low-energy savings of BT LE for the connection and the race-to-sleep efficiency of Wi-Fi for the transfer. (Apple hasn't released any security information yet, but if they've maintained the security model it will be similarly terrific.)
Between iOS devices nothing changes, of course.
Between iPhone or iPad and Mac, when the iOS device is unlocked it'll show up as an AirDrop target in the OS X Finder and the Save option in the menu. OS X devices show up just like iOS devices on the iPhone or iPad.
Between Macs it works similar to how it did in the past but you have an optional checkbox to "AirDrop with Older Macs".
This means that no matter where you have a piece of data, be it a photo, contact, or anything else shareable at all, you can move it directly between all your Apple devices with just a couple taps or clicks.
Tethering from an iPhone or iPad cellular to a Mac or iPad Wi-Fi has always been a bit of a pain. Some of that has been carriers and their cockamamie tethering plans. But some of it has always been the process which, at the best of times, required a password to be entered, and at the worst required off/on toggles or reboots to get it working consistently.
Now your Mac or iPad Wi-Fi can instantly connect to your iPhone or iPad cellular and you can be up and using the internet in no time.
How the new Instant Hotspot works
Although I haven't seen anything specific from Apple on how they're identifying known devices for tethering, based on how the rest of Continuity works my guess is you need to be logged into the same iCloud account (Apple ID) on your cellular device as you are on your Wi-Fi device. That way Apple knows they're yours and random people can't automagically leach your bandwidth.
If that's the case, and you have Bluetooth LE to pair with, your iPhone or iPad cellular will simply appear as an option in your available Wi-Fi network connections list, distinguished with Apple's linked-ring tethering icon. Connection type (e.g. LTE) and battery level will also be displayed on the Mac.
So, regardless of whether your iPhone or iPad cellular is sitting right in front of you, or is across the room in a bag, there's no password to enter, no toggles to flip, no devices to reboot. Just tap/click, connect, surf.
Again, AirDrop and tethering aren't new features they're new implementations of pre-existing features. They may lack the impact of Handoff or call/SMS/MMS Continuity, but they solve really usability problems for real people. Apple is sometimes accused of spotlighting a feature one year only to forget about it the next. By looping AirDrop and tethering into Continuity Apple not only brings them back into the spotlight but makes them better than ever before. Hopefully this is just the beginning of that trend.