You must pair the headset before you can use it. See page 13 in the booklet.
"When turning on the head set press and hold the center button (phone icon). The inside ring should start flashing red and green. Turn off the on the blue tooth in setting on the iphone. The phone will find the headset and ask for a pairing code, enter 0000. You will be paired. Then you use the headset a second time you may have to go to the blue tooth section in setting and touch the SBH-500 which will reconnect the headset without having to pair it again. Needless to say only the volume control works. The mic works fine after answer the phone. Warning, when removing the headset do not pull it off from the ear phone cups, it will break the phone apart. This unit has kick A bass compared to the Motorola S305 which I have also. Best Buy had the unit on sale 49.99, 20 off a few weeks ago. You just can't get the sound quality with ear plugs.