You need to make sure Bluetooth audio is enabled on your device. Go to CD/Multimedia > Bluetooth > Highlight your phone and click the Option button (bottom right under the iDrive wheel). Select Configure Phone from the Options panel on the right and check the audio option. You can also check in Options to see if Bluetooth audio is disabled for all devices under Configure Bluetooth. Like someone mentioned, hooking up a USB cable will disable bluetooth audio for that device and it needs to be manually re-enabled after that. Sound quality over Bluetooth is noticeably better than via USB, for some reason, in our X3s.
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