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Originally Posted by Brian-bmw
Why wouldn't it work-- the rest of the modules in the nav system are the same. They all communicate over the I-Bus. The only two issues I can think of are if the radio tells the screen to pop up (and that causes problems) and if the radio can not handle the E38/E39/X5 version of DSP.
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The Z4 has jog dials on the radio itself whereas the e46 uses the NAV screen. The hard button features are a bit different also.
It may work, you're welcome to try if you feel adventurous.