Yes, but other features do work with the iPhone (such as cover art, bluetooth streaming, single cable connectivity/no need for Y-cable), and yes, if your car was built last week, it will support it. My Sept 6th 7 series build supports it as does my biz partner's new X5 he just picked up today.
Oh, almost forgot, yes, you can upgrade the software. Drivers will be available at http://bmw.com/update
2013 Mercedes-Benz ML63 AMG Loaded
2011 BMW 750Li Carbon Blk Metallic, Oyster/Blk Nappa Leather, Ash Grain Trim, (Camera, Cold Weather, Driver Assist, Luxury Seats, M Sport w/20" Wheels, Premium Sound, Rear Entertainment Pkgs), Integral Active Steering, Instrument Panel w/ Leather, Ceramic Controls, Head-up Display, Smartphone Integration, Combox
2004 BMW 745Li Titanium Silver, Black Leather
Former: 2008 BMW 750Li, 2001 Audi A6 2.7T, 1998 Ford Expedition, 1993 Lexus ES300