They probably expected that the car had a traditional audio harness in the dash. That is not the case for navigation-equipped cars. Furthermore, your car probably has DSP (do you have the "DSP" option in the man menu of the nav screen?) If you have DSP, then then they will need to replace the amp and speakers too.

The audio harness terminates in the trunk for your car. Specifically, the radio is mounted next to the battery and the amp is under the CD changer. Replacing the audio system in a nav-equipped BMW typically entails running all new wiring for the new head unit. I am not aware of an aftermarket conversion harness that will do the job.

How much iPod control do you want? You can install an aftermarket device like the Dice or Intervee II that will give you pretty good iPod control. Or, you can upgrade your radio module to gain a generic Aux input for the iPod. I use Aux input for my car.

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SOLD
2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input