My X5 was delivered with the iphone cradle, sans the adapter. The console itself is small to begin with and the cradle only further limits the consoles usefulness. After searching valiantly and finding no info on the cradle removal I decided to forge ahead and remove it myself.
Before doing so, you need to order a trim cover to replace the cradle assembly. It's about an $18 part, #51169252106. Number 8 on the diagram found at the link below.
http://realoem.com/bmw/diagrams/a/h/490.png
Remove the three visible star head bolts at the rear interior of the console. Remove the fan cover trim piece (simply snaps off), then pull the fan forward to reveal and remove the fourth star head bolt. That releases the cradle assembly.
Now for the fun part, disconnecting the various wired components including antenna cable, power, and fan wire. These are snap fit connections, but you'll have to analyze closely to determine how they release.
Once done you simply snap in the aforementioned $18 trim cover. Easy!
I must confess, though, that I was puzzled until I figured out that the fan trim cover and fan must first be removed to access the fourth bolt.
The iphone cradle sounds good, but in practice I couldn't see putting it to use. Plus the additional space freed up within the console is infinitely more useful to me than buying the expensive adapter and going through the process of removing the phone's cover, snapping it into place and then removing it again each time I enter and exit the vehicle.