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I would think it is the phone right off hand. BMW seems to only be compatible with some bluetooth phones (depends on what options they have enabled in that phone). I had a samsung phone that had bluetooth but was only able to make calls by dialing on the phone and using the car as a headset. I have switched to the motorola e815 and it works great. I would suggest that you try to use someone else's phone or go to a phone dealer and ask them to use a phone to see if it works better. If not then take it to the dealer and have them look at it.
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