My 08 x5 works flawlessly with the Bluetooth. Often callers are not aware that I am in the car and on the hands free. The sound quality is excellent on my iPhone 3G and my iphone4.

Make sure both car and phone software is up to date. I had poor call quality on my 135 vert and by updating the software on both it fixed the problems.

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2009 135i M Sport Convertible
2008 X5 3.0si
2003 E46 318Ti M Sport Compact - donated to parents
2003 116i Hatchback - donated to brother
2002 316Ti - Sold
2000 318ci M Sport - Sold
1998 318i Sedan - Sold