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Y-cable
Answer to my own question... Tested white USB only cable vs. BMW Y-cable on my car which clearly does have the newer tech that allows the audio to pass digitally through the USB connection. The BMW Y-cable routes the audio signal to the mini plug only-- if not plugged in, no sound is heard. White cable works perfectly. If anyone wants an OEM BMW Y-cable which came with my '09 335i, please send me a message.
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