With regard to cellphones, it refers to a wireless microphone and speaker. To avoid holding the phone by hand, hands-free headsets and car systems use Bluetooth transmission to synchronize with the user's cellphone within a range of about 30 feet. See
Bluetooth.
Hands Free and Audio
"Hands Free" and "Audio" may appear as a menu option in hands-free car systems because smartphones are both cellphones and music players. The Hands Free refers to telephoning, and Audio refers to listening to music. See
Bluetooth audio.