I must have drilled a small hole in the bottom of the cupholder to bring the cable in, but I don't remember doing that. I think there was a removable rubber liner, anyway. It was almost eight years ago. I then cut out the centre of the lobster tray (pen holder) insert, so that the iPod would sit in the tray securely, and the sliding cover would still close.

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2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue