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BMW3W,
I think you do need to have the software activated. The options for SAT radio on my X3 were grayed out and I could not choose them until the dealership installed the software coding. Just like Harplayr mentions, the technicians had difficulty in getting it working and had to consult with BMW but they were eventually successful.
I have a feeling that what you are being told is incorrect.
If you want to order SIRIUS as a non-dealership option you can always go to an after-market stereo shop but they will need to install a separate little screen on your dashboard and have wires in plain view for it to work. It will not work natively within iDrive without BMW software and the after-market stereo shops do not have access to iDrive.
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