Bluetooth is a digital wireless data transmission standard in the 2.4 GHz ISM band aimed at providing a short range wireless link between laptops, cellular phones and other devices. The IEEE 802.11 wireless local area networks (WLANs) also operate in this frequency band. Since both systems operate in the same frequency band, there can be interference between them. The performance of the Bluetooth medium access control (MAC) layer is evaluated when the Bluetooth radio is operating in close proximity to other Bluetooth piconets and IEEE 802.11 WLANs. A probabilistic approach is used to derive the packet error rate (PER) of a Bluetooth piconet and the aggregated throughput of N collocated piconets.