Originally Posted by 4EST
I thought the mighty ipod has a usb port in all those pins, as all the other phones/devices out there, but I guess I'm wrong, maybe Apple thought "who uses USB anyway" :P
Of course the connector has USB. The problem is that, once upon a time, though the protocol for control and streaming over USB existed, that channel was subject to DRM - DRM'd tracks couldn't be played over it since in theory you could make an exact unprotected digital copy that way. BMW (and all the other manufacturers, for that matter) didn't want to implement a single-usb-cable solution that would leave users unable to play an arbitrary subset of their music, so they came up with the Y cable solution - audio outputs as analog signal over the aux out in the dock connector and to the 3.5mm plug, while control and communication is handled over the serial connection that's existed before the dawn of iPod time.
Unfortunately, it's pretty buggy and inconvenient, and MORE unfortunately, it was the ONLY solution until record labels finally gave up the DRM ghost for good as of April 7 2009 (at least, that's when everything in iTunes became available without DRM.
Luckily, newer cars come with native USB streaming (although not ALL cars, I know the Hyundai Veloster has always had it [2012 was the first year], while the GTI even as of 2012 DOESN'T), but UNLUCKILY there's no MULF software update or anything of the sort to enable it on older cars.