Yup. The iphone works fully on my '05 Z4 and also my '05 525i. Full address book transfer with just over 550 contacts and all other features work as well.

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2005 BMW Z4 Roadster 3.0 - Black Sapphire with Dream Red Extended Lthr / Premium Pkg / Sport Pkg / Heated Seats / Xenon / NAVIGATION / 6-disc / AUX
2005 BMW 525i - Alpine White with Beige Lthr / Premium Pkg / Cold Weather Pkg / 166 wheels